Case Study – Landscape Architects

We were instructed in the sale of a landscape architect business.  It was owned by a husband and wife team who both worked in the business and, as they were approaching retirement, looked to sell to a bigger practice to realise the value of the business they had built up, but also wanted to stay on to help the transition and to ensure they received the earn-out that was part of the deal.

The clients instructed us early, which is always good, and we were able to advise on the Heads of Terms, the document setting out the key terms of the transaction.  We were able to help shape this and dealt with some tricky issues around restrictive covenants, that could have been a sticking point later. 

The deal was structured with a significant upfront payment, a deferred payment after a period of time and an earn-out reflecting the profitability of the business over a longer period of time.  This is not unusual.

As is usual, the buyer’s solicitors drafted the transaction documentation.  We were able to negotiate the terms of the SPA (Share Purchase Agreement) to minimise our client’s risk and to ensure they are confident of getting the subsequent payments.  We also negotiated the contracts under which they became employees of the buyer and ensured the restrictive covenants tied together with the SPA and their employment contracts and, more importantly, reflected what they had agreed.

The final area that we delivered was a Disclosure Letter, along with an index and (electronic) bundle of documents, which protected our clients against claims for breach of warranty.

Finally we ensured that completion took place on the agreed day and that our clients received their proceeds of sale.