Hi All, recently submitted an LOI for a Commercial HVAC Company. Any self funded searchers that have recently closed a deal in the last year can provide some guidance on what's next after an LOI is submitted? Should it be negotiated as stock or asset sale? Who do you use for due diligence on the target while keeping search cost low? Thanks!
LOI submitted. What's next?
by a searcher from Columbia University - Columbia Business School
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Also, if this is a union shop, be very sure you understand the implications of those underlying union agreements, including any obligations (especially personal obligations) to any pension funds. Consider hiring a lawyer with experience in the labor law space (disclaimer - I am not that lawyer).
Finally, keep in mind that there is a hybrid model available that allows you to blend the administrative convenience of the stock sale with the tax advantages (for a buyer) of an asset sale via a 338(h)(10) election. Google this for a plethora of information on this option. Keep in mind the potential liability of the stock sale remains significantly higher than the asset sale, even in the context of the 338(h)(10).
Good luck!