
What are the various legal documents involved in an acquisition?
By Adam Friend | Senior Vice President of Business Development
Legal documentation is a fundamental part of the transaction process. The main document is the Purchase Agreement, which outlines all of the terms of the acquisition, such as:
Purchase price
Earnout terms (if any)
Escrow terms – amount and duration until release
Assets included or excluded in the sale
Liabilities included or excluded in the sale
Representations and warranties of the parties
Disclosure schedules for key information relied upon by the Buyer
Other legal documents can include:
Non-Competition Agreement
Outlining restrictions on the Seller to start or participate in a competing business post-sale
Employment Agreement
Governing employment of the owner or other key personnel
Consulting Agreement
For transition-related services by the owner
Office Lease
If a facility used by the business is owned by the Seller
Transition Services Agreement
In the event there are shared resources that need to be used for some period of time post-closing (typically in a carve-out transaction from a larger entity)