After months of deliberation, organisation, conversation and negotiation, with the support of your Benchmark International team and your other trusted advisers, we are reaching the precipice of legal completion. Or simply – ‘Completion’.
After envisaging this moment for so long, you might be wondering how the day of Completion will play out, and indeed what will happen over the next few days, weeks and months. What is clear is that you are about to enter a new stage in your personal and professional life.
Samantha Tapson, Director at Benchmark International, recounts the advice she and her team share with clients at this exciting juncture.
The Legal Process: Endless Paperwork …
Signature after Signature …
It’s easy to lose track of all the moving parts of a transaction, particularly when it comes to the many legal documents that need to be executed. Whilst most documents can be executed remotely via e-signature, you may need to visit your lawyer's office for some actual signatures. Rest assured your lawyer will guide you through the maze of both real and e-signatures and how you will need to sign each document, informing you when witnesses are required. Bear in mind if you are executing documents via e-signature, you will still need a physical witness.
The main legal document executed by both parties is the Share Purchase Agreement (SPA). This document will be very familiar to you at this point, as all key areas will have been discussed, negotiated and agreed upon in the weeks prior to Completion.
Other legal documentation may include new service or consultancy agreements (if you are continuing to support the business for a period after completion), equity documentation (if you are retaining shares as part of the transaction), and several other ancillary documents, all of which will have been agreed between parties ahead of signing.
Are We There Yet?
Once all documents have been signed by both parties, the buyer’s lawyer will confirm that they are in funds and the legal teams will confirm to each other that they are happy with the signed documentation provided by their counterpart. At this point, we are ready to complete, and the lawyers will confirm Completion to all parties via a completion phone call, where any final matters will be discussed and agreed.
Physical completion meetings between all parties are less common these days and many of the meetings that you have had with your buyer may well have been virtual. However, if buyer and seller are keen to have a physical completion meeting, this is something that lawyers are often willing to accommodate, which at least gives everyone the chance to have a celebratory glass of champagne after months of hard work. After all, a virtual congratulatory handshake is never the same!
Checking your Bank Account
Whilst the initial confirmation from your lawyer may feel slightly anticlimactic, the real excitement will come when the sales proceeds arrive in your bank account (net of any fees and disbursements, of course). As money typically will be transferred from the buyer’s lawyer, to your lawyer, and then to you, this can sometimes take us into the next day’s banking hours. If there are international transfers involved, then this may well take a couple of days. The wait can sometimes feel endless, but both lawyers will do all they can to ensure funds reach you as soon as possible.
The Deal is Done: What Happens Next?
Taking Stock & Planning Ahead
Once the initial celebrations are over and you find a quiet moment to reflect, you will understandably be wondering what life will look like in the first few days and weeks post completion, both for yourself, for your employees and for the business itself. This will greatly depend on the level of involvement you have agreed to have in the company post-completion. Plenty is going to change, although the hard work and planning conversations pre-completion should ensure you are well-informed of the buyer’s intentions.
As most buyers will expect a handover period, it is likely that you will work to support their post deal implementation plan. During the first few weeks, this will typically involve supporting the new owner with important communications, particularly informing the management team and wider staff, if appropriate.
Informing your Workforce
It is important to note that as part of the deal discussions pre-completion, you will have discussed and agreed with the buyer an appropriate way to inform staff, and indeed whether you wish to issue any press releases that announce the transaction in the public domain.
For many employees, a change of owner can create anxiety around future roles and reporting lines, and even about job security, so it’s helpful to advise your workforce of the buyer’s rationale for the acquisition and the great future that lies ahead. It’s normally prudent to have discussions with employees as soon as possible post-completion as news of the transaction will spread quickly by both word of mouth, official press releases, and shareholding changes on Companies House.
Whilst breaking news to staff will understandably be a key concern for you, these conversations will be well-rehearsed to ensure that you and the buyer are comfortable with they key messages delivered, including growth plans for the company and key initiatives.
Dealing with Changes Yourself
Operational changes, in many cases, will include no longer being in control of the company’s operations, changes to your role, new reporting requirements or regulations, and so on. These will have all been discussed and agreed in the preceding months and there should, by now, be few surprises.
The biggest change for you, though, is likely to be a change in your personal and professional identity within the company, which may take time to adjust to. And these changes might not just affect you: family members may be affected, especially any family working within the business, as well as the workforce that has trusted your direction for so long.
You may have agreed to remain employed in the business post-sale, although this may be in a different capacity, with a new role description focused on a more specific set of goals. Whilst this change in position will no doubt take some getting used to, plenty of discussions pre-completion should ensure that you are comfortable with your role post-completion and have a good idea of what to expect.
Enhancing your Relationship with the Buyer
There is no doubt that the stresses and strains of the entire sale process will put everyone’s patience to the test, so now is definitely the time to rebuild relationships. Both parties should ensure that they communicate effectively throughout the first weeks after completion, ensuring that your partnership is strengthened as the business takes its first steps under new ownership and to look forward, together with the buyer, as a united team.
Completion Day = Day One
As you start your unique post-sale journey, remember that you are not alone. Benchmark International, alongside your other advisors, will remain available to discuss any queries that might arise after completion.
This may include support regarding any completion accounts processes, contingent consideration calculations, or just a general discussion. It is important to remember that your advisors will remain available for a conversation whenever required to support the transition, and if any matters require clarification on the legal documentation, your lawyers will happily assist.
We greatly enjoy receiving updates from our clients as to the journey they have embarked upon post-completion. Make sure to stay in touch! We are just a call away.
T: +44 (0) 1865 410 050
Europe: Michael Lawrie at +44 (0) 161 359 4400 / Lawrie@BenchmarkIntl.com
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com
Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com
ABOUT BENCHMARK INTERNATIONAL:
Benchmark International is a global M&A firm that provides business owners with creative, value-maximizing solutions for growing and exiting their businesses. Benchmark International has handled over $10 billion in transaction value across various industries from offices across the world. With decades of M&A experience, Benchmark International’s transaction teams have assisted business owners with achieving their objectives and ensuring the continued growth of their businesses. The firm has also been named the Investment Banking Firm of the Year by The M&A Advisor and the Global M&A Network as well as the #1 Sell-side Exclusive M&A Advisor in the World by Pitchbook’s Global League Tables.