Buying a business

Acquiring a business can be desirable for many reasons. Most often, it is to accelerategrowth and achieve synergy benefits. At Sophista, we help to determine the acquisitionstrategy that best aligns your own goals, whether it is a strategic acquisition or a buy-and-build strategy. Finding the right ‘fit’ between your business and a target company is of great importance, and achieving success in an intensive acquisition process depends heavily on the professional guidance and advice involved. With our extensive experience, dedication and targeted overall approach, we are well positioned to guide you every step of the way.

Preparation

Based on your objective, together we define a strategy for a successful acquisition. If you already have a target company in mind, we will outline the strategy for the takeover process: which steps should be taken and who will take these steps? If no target has been defined , we will work with you to establish a detailed profile of the desired company, including factors like size, culture, geography, market and more. From there, we create a longlist of companies that meet these criteria.

Approaching candidates

After the longlist is reviewed, we initiate contact with the targeted companies and initiate interviews. This is done while guaranteeing your anonymity through a confidentiality agreement.

Negotiations

When a suitable company is identified, we evaluate the provided information memorandum. In addition we gather, as much market data as possible to assess the opportunities and threats after acquisition. Sophista conducts a detailed (financial) analysis of the target company provides a valution to service as the basis negotiations. With years of experience in deal-making, we ensure effective and negotiation with an eye to the future, especially in cases where collaboration with the seller continues post-acquisition. The key terms are documented a Letter of Intent (LOI).

Due diligence & Financing

A due diligence is conducted to evaluate the financial, commercial, tax, legal and ESG aspects of the target business. We coordinate communication between all parties and conduct the final negotiations. Furthermore, we discuss the financing requirements for the acquisition. Sophista has strong relationships with Dutch banks and other financial institutions. We prepare financing applications and negotiate with the equity providers. Once due diligence and the financing are completed, the purchase agreement is drafted.

Deal closing

After an intensive process, the deal closing represented the final step. The necessary agreements are prepared based on the transaction, including:

  • Agreement of Purchase and Sale. This documents outlines all the terms and conditions between parties for the transfer of the business.
  • Shareholders’ Agreement. The seller may remain a partial shareholder of the company after the sale. You will then partner with your fellow shareholders. All agreements between shareholders are recorded in the Shareholders’ Agreement.
  • Loan Agreement. It may have been agreed in the negotiations that part of the purchase price will remain owed by you after acquisition. The arrangements under this (subordinated) loan or earn-out are recorded in an agreement.
  • Lease agreement. If the property is leased from the buyer post-acquisition, a new lease agreement may be part of the agreements.
  • Advisory agreement. It is often agreed that the seller will continue to play a role as an advisor after the acquisition. These agreements are recorded in a separate agreement.

Once the parties have finalized and agreed upon on these agreements, the transfer of shares or business activities takes place, usually at the notary, officially completing the sales process.

Transactions