Buying & Selling a Business

A business sale looks, from the outside, like a single signing on a single day. From the inside it is a months-long process of letters of intent, due diligence, drafting, negotiation, third-party consents, regulatory approvals, and the careful construction of a post-closing transition that lets the buyer succeed and protects the seller from indemnity exposure that may otherwise stretch for years. We have guided clients on both sides of that process for more than four decades.

Our M&A work is concentrated in the closely-held middle market: family-owned operating companies, professional services firms, hospitality businesses, real estate operating companies, and the cross-generational sales that occur when one branch of a family buys out another. The dollar amounts vary; the diligence and drafting discipline does not.

Letters of intent and term sheets

Most transactions begin with a letter of intent that establishes price, structure, exclusivity, and the framework for the definitive agreement. Although LOIs are usually non-binding on substantive terms, the binding provisions—exclusivity, expense responsibility, confidentiality—begin to shape the transaction immediately. We draft LOIs that move quickly to the right answer on price and structure while protecting the client's optionality if the transaction stalls.

Due diligence

Due diligence is the part of the deal where most surprises live. For buyers, our diligence work covers organizational documents, capitalization, material contracts, intellectual property, regulatory and licensing posture, employment and benefits compliance, environmental exposure, real estate, tax filings and positions, pending and threatened litigation, and the host of change-of-control consents that may be triggered by the transaction itself.

For sellers, our work runs in the opposite direction: surface issues before the buyer does, build a clean data room, prepare disclosure schedules that match the representations, and resolve the small problems that, if left to discovery, expand into price adjustments and indemnity claims. The cleanest closings are the ones that began with the most candid pre-marketing diligence.

Asset versus stock structure

The choice between an asset purchase and a stock or membership interest purchase carries enormous tax and liability consequences. Asset purchases generally favor the buyer—stepped-up basis, the ability to leave behind unwanted liabilities—while stock purchases generally favor the seller, who obtains capital-gain treatment on the entire sale and is freed from a long indemnity tail. Where the entity is an S corporation, a §338(h)(10) or §336(e) election can give the buyer asset-purchase tax treatment on a stock-purchase legal structure—frequently the right answer for both sides.

We model the alternatives against the seller's basis position, the buyer's depreciation appetite, the existing entity's contracts and consents, and the regulatory licensing that may favor one structure over another. The right structure is rarely obvious; it requires running the numbers.

Definitive agreement, representations, and indemnification

The definitive purchase agreement is where the deal lives. The representations and warranties, the disclosure schedules, the survival periods, the indemnification baskets and caps, the escrow and holdback arrangements, and the special indemnities for known issues collectively determine how much risk each side bears after closing. We draft these provisions with the post-closing dispute scenario fully in mind: every represented fact will be tested by the buyer's first integration audit, and every limitation will be tested by the first claim.

For sellers, we focus on tight survival periods, narrow indemnity baskets, and clear materiality scrapes. For buyers, we focus on targeted special indemnities for known risks, escrow arrangements that align with the realistic claim timeline, and representation and warranty insurance where the deal size justifies it.

Earn-outs and seller financing

Where the parties cannot agree on price, the gap is often bridged with an earn-out, a seller note, or a combination of both. Each is its own document with its own enforcement profile. Earn-out litigation is the single most common post-closing dispute we see, and it is almost always traceable to vague accounting definitions or to the buyer's post-closing operational decisions affecting the earn-out metric. We draft earn-outs with the dispute scenario already in front of us.

Closing and transition

Closing is choreography: stock or membership transfer documents, cross-receipts, escrow funding, third-party consents, non-competition agreements, transition services agreements, employment and consulting agreements with key personnel, and the coordinated release of liens and security interests. We manage the closing checklist directly and serve as the central point of contact for the seller's CPA, the buyer's lender, the title company, and any regulatory agency whose consent is required.

Whether you are evaluating an unsolicited offer for your company, planning a sale process over the next twelve to eighteen months, or assessing a target you have already begun to diligence, we welcome the opportunity to discuss the engagement.