Asset v. Stock Sale to Leave Behind Seller Debt?

by a searcher

3 years ago

I'm looking at a company with low FCF and heavy debt so not particularly attractive however their technology is interesting.  What are the group's thoughts on structuring the deal as asset sale to leave behind the seller liabilities?  Has it been done before?

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6 comments

investor from Illinois Institute of Technology

Is the company's true profitability the reason for the low FCF? Using their IP in the same business channel perhaps makes little sense; however, using it another application would. Consider licensing the IP.

3 years ago | like reply | 1 like

searcher from Massachusetts Institute of Technology - MIT Sloan School of Management

UCC filings are probably relevant to this discussion. You should be able to check UCC filings with the state to see if debt is secured by assets.

3 years ago | like reply | 0 likes

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