Business Owner Gets Full Value for His Business
How do you ensure you’re going to get all that’s promised?
A client who struck a deal to sell his business for $25 million plus payments based on future performance of his company came to Haynsworth Sinkler Boyd with several concerns.
He was worried about the future payments. His business was very profitable, in part because it was very leanly run. After the acquisition, the business would be a small part of a huge corporation—his future payments would be at risk if the business were poorly run or had to absorb significant corporate overhead that provided limited or no benefits to the business.
Haynsworth Sinkler Boyd protected his future payments by negotiating provisions that ensured that:
- The business would be maintained as a separate entity for the measuring period for the deferred payments.
- Our client was given a “no-cut” employment agreement for the measurement period, under which he would manage the business unless results deteriorated significantly.
- Allocations of overhead were limited during the measuring period.
- Credits for new accounts were allocated to the business.
Result: Our client received the maximum possible payment called for in the deal.