Assuming customer agreements through an asset purchase

by a professional

1 year ago

I'm working with a client that is acquiring an industrial services business through an asset deal.  As a non-traditional buyer for this industry, they are worried about the transferability of customer agreements, specifically customers not executing a consent to assignment and/or renegotiating rates and terms, which could lead to margin erosion. Does anyone have any experience with this?

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searcher from INSEAD

👍

1 year ago | like reply | 0 likes

investor from Illinois Institute of Technology

This is a concern, and legally solved by a stock deal. However, the client contract is only as good as the continuing service the acquired company provides. In our first deal (asset structure), we kept one of the three owners on as president/chief marketing person. We lost no customers given the continuity he provided.

1 year ago | like reply | 0 likes

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