A well-known entrepreneur disposing of a recruitment business to a French buyer

We advised a well-known entrepreneur, on selling his shares in a recruitment group and disposing of the business to a French buyer.

This was a complex and lengthy deal because the shares had been transferred to family members who were minors. This caused contractual difficulties on a share sale, which we successfully unravelled.

Other complications arose because intellectual property (IP) belonging to the target company had been transferred to an offshore company based in Jersey. This company had been dissolved with no knowledge that it was holding English IP.

To make sure this did not scupper the deal, we included a post-completion obligation in the share purchase agreement, for our client to procure the Jersey company and assign the IP to the target company. We worked with advisers in Jersey after completion, and managed to secure the funds that the buyer had held back while the procurement took place and return the money to our client a full 12 months earlier than expected.

The deal took many complex turns, changing from a completion accounts deal (where the final purchase price of a business or asset is determined based on a review of the seller’s financial accounts and other financial information) to a “locked box” deal (where the parties both agree on the final purchase price using the company’s most recent audited financial statements and there is no post-completion adjustment) These changes required substantial redrafting of the documents very quickly.

Our client was often out of the country, meaning we needed to be responsive out of hours and at weekends to deal with differing time zones. In the end, the heads of terms were agreed in mid-March, with the exchange on 26 April and completion on 24 May. This was a very short period in which to buy a company group of this size with so many assets, but it was a timescale that was achieved to meet client expectations.