In our first 3 articles in this series ("Proper preparation prevents poor performance", "Get your backyard in order" and "Transaction documents") we set out our top 10 tips and traps for sellers to consider when they are proposing to sell their business.  Our final 2 tips relate to the completion and post-completion stages of the transaction.

Tip 11 - The deal isn’t done until completion occurs

• Keep pressure on after signing and use a “completion agenda”.  People often fall into the trap of thinking that the deal is done once a sale and purchase agreement is signed, but this is often not the case and a lot of work still needs to be done (such as satisfying conditions precedent and getting ready for completion).
• Don’t announce the deal early unless you are required to do so as a matter of law (e.g. to comply with ASX continuous disclosure requirements).  If the transaction does not complete (e.g. because certain conditions precedent cannot be satisfied), then seller may have PR and HR issues to contend with in circumstances where employees, customers and suppliers becoming aware of the proposed sale.
• When organising the release of registrations on the Personal Property Securities Register, start the process early. The buyer will likely require all PPSR registrations to be released prior to or at completion and it can be difficult to convince secured creditors and other third parties that hold PPSR registrations over a target business to release those registrations quickly. There may also be historical registrations that haven’t been released (even though they are no longer relevant) and reconciling all of the registrations can be time consuming.

Tip 12 - Don’t forget steps after the champagne is popped

• There are often still a number of steps that need to be finalised after completion of the sale (including ASIC filings, asset transfers (e.g. motor vehicles), escrow arrangements, preparation of completion accounts, assisting the buyer with hand-over queries, transitional services, restraint periods, and warranty claim periods).
• Prepare a timetable of all the post-completion steps and diarise the relevant dates/deadlines.

To assist sellers in planning for a potential sale of their business, we have prepared a mergers and acquisition planning checklist.  The link to the download page is below:

Download

For more information, please contact:

Craig Sanford, Director, Sierra Legal on M: +61 (0) 416 052 115 or E: csanford@sierralegal.com.au

Mike Jeffery, Director, Sierra Legal on M: +61 (0) 402 745 054 or E: mjeffery@sierralegal.com.au