Practice areas

Acquisition of two companies through an LBO

Our client

A family holding where the only partner is a manager, seeking to acquire companies in the audiovisual communication sector.

The client wished to be assisted on all financial aspects of the holding and for all issues relating to the acquisition of the target companies.

The context

The target companies, comprising around 30 employees, had been recently created by four partners, including three who took part in the LBO by partially financing it through the sale of some of their shares.

The course of actions

Our teams prepared and took charge of all the stages of the acquisition of the targets (acquisition audit, contract drafting, etc.), while handling negotiations with the banks to finance the LBO.

At the same, we also handled negotiations with the founding partners taking part in the LBO, to determine their new role in the new entity, the rules of corporate governance and all conditions to be met for them to acquire shares (shareholders’ agreement).

Lastly, in the following year, we handled the acquisition of the of the two target companies.

The result

Our client managed to conclude his acquisition through the LBO and established a start-up in the audiovisual communication sector, hence ensuring the continuation of the targets under a new business name, after having secured the growth potential of the group in collaboration with the founding partners.

Acquisition of a company under receivership

Our client

An engineering group seeking to acquire one of its rival companies under receivership. In the context of a tense social environment, the client wanted to keep the workforce of the company to be acquired while maintaining the level of its financial viability after the acquisition.

The context

The target company comprises over three hundred employees, which presents a challenge in a difficult social context and a rather complicated legal context. Indeed, the existence of a foreign subsidiary rendered the acquisition difficult. The operation was rendered even more difficult as it involved financing from a pension fund, whose negotiations had to be tackled.

The course of action

We prepared and oversaw the acquisition proceedings before the relevant commercial court, supervising and coordinating operations with the court administrator and other concerned authorities (public prosecutor’s office).

During the buyback operation, we handled the negotiations with the fund, our client’s partner, and drafted all the legal documents in condition precedent to obtaining the buyback operations.

We also acted on the litigation involving the foreign entities to determine the law applicable to the insolvency proceedings and securities obtained by the banks from the company under buyback.

The result

Our client managed to complete all buyback transactions and established an engineering business group with over 30 offices in France and internationally, hence expanding their economic activities while conserving their commercial and human potential, particularly in terms of the acquired company.

Setting up a multidisciplinary team in connection with the disposal of a subsidiary

Our client

The management team of a subsidiary company of a CAC 40 group being sold by the headquarter office through invitations to bid. 

The context

The management team had two concerns: optimising the value of the company for the sale in order to respect the commitment made to their shareholder and; negotiating the future of the employees, management team and future shareholders of the new entity with the acquirers.

The course of action

We set up a team made up of members of our firm’s employment law and corporate law departments, under the supervision of a senior partner. The first team dealt with the management team’s professional outlook by negotiating their allowances based on the valuation of the company to be sold and by negotiating a conscience clause. This paved way for calm negotiations with the buyer. The corporate law team handled negotiations and supervised the setting up of a stock subscription warrants system, making it possible for the management team to participate in value creation.

The result

The transaction was a success. Only one of the executives used the conscience clause as he did not get along with the new shareholder, but this did not diminish the company’s potential, keeping in mind that the departure occurred without any litigation thanks to contractual provisions.

Defence strategy in connection with representations and warranties

Our client

The shareholders of a family-owned SMB having recently realised their assets, agreed to representations and warranties. The acquirer of the shares established the indemnification agreement for an amount equivalent to 30% of the transaction value.

The context

Although the joint liability of the family shareholders was indicated in the deeds, the acquirer’s request had created some tension between the management shareholders and the family as they considered they were not liable for the consequences leading to the implementation of the indemnification agreement. In addition, the acquirer’s requests were bound to be disputed, if its implementation was not applied accordingly.

The course of action

An analysis and review of the signed agreements allows for the recognition of the joint liability between the selling shareholders, which is a key factor for an effective defence of a representations and warranties clause. Secondly, defining a defence strategy with the aim of contesting the implementation conditions and buying the necessary time to rebuild the case and collecting elements for a joint defence.

The result

After a first trial in the commercial court, a settlement was reached between our client and the acquirer, who had implemented the representations and warranties clause for a value equivalent to a third of the initial demand and hence ending the representations and warranties period, thus enabling all the shareholders to definitely close the case.

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