Buying a business out of an insolvency process can be a great way to create opportunities for other organisations to expand while saving jobs at the same time.
However, there are many pitfalls that need to be carefully considered and a different type of expertise is required compared to normal M&A transactions. Here are just a few of the common issues that need to be considered;
Insolvent opportunities by their nature are reactive and arise at very short notice, but now may be a good time for businesses to proactively think about what opportunities to look out for and how they might be pursued should they arise.
Thinking about these issues in advance and developing a framework to address the different issues associated with an insolvent transaction may put them ahead of competitors, where the ability to complete quickly can be a deciding factor.
Notwithstanding this, the process will largely be reactive to the circumstances and will need to be carried out at an intense pace.
Having completed many insolvent transactions, we are well placed to help businesses carry out due diligence, structure the offer, negotiate the best value and create a robust post-acquisition plan, providing you with the best chance of a successful acquisition, minimising the risks and maximising the opportunity.
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Tax legislation that is prevailing at the time, is subject to change without notice and depends on individual circumstances. Clients should always seek appropriate tax advice before making decisions.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
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