Buy-side representation for acquiring a privately held business.
Buy-side representation from evaluation to closing
Buying a business involves more than agreeing on a price. The buyer's counsel evaluates the target's legal and contractual foundation, negotiates protective terms and manages the closing so that what the buyer actually receives matches what was represented.
From letter of intent to purchase agreement
- Letter of intent: establishes price, structure, exclusivity and the diligence timeline.
- Diligence: legal, financial and operational review of the target.
- Purchase agreement: the binding document allocating risk through reps, warranties and indemnification.
- Financing: coordinating any lender or seller-financing requirements with the closing timeline.
Common buyer protections
- Indemnification for breaches of representations discovered after closing.
- Escrow or holdback of a portion of the purchase price.
- Non-compete and non-solicitation covenants from the seller.
- Closing conditions tied to landlord consent, license transfer, or key-employee retention.
Coordinating an acquisition with an investor visa
Foreign buyers often intend the acquisition to serve as the basis for an E-2 or L-1 filing. The purchase structure, source-of-funds documentation and post-closing operating plan should be aligned with the immigration filing's requirements before the purchase agreement is signed.
Process
- 1
Evaluate
Review the target's financials, contracts and operations before making an offer.
- 2
Offer
Negotiate a letter of intent establishing price, structure and diligence terms.
- 3
Diligence
Investigate the target's legal, financial and operational condition.
- 4
Close
Negotiate and execute the purchase agreement, coordinate financing and close.
Acquisition sequence
The usual order of a Florida business purchase, from first terms to the period after closing.
- 01
Letter of intent
Price framework, structure and exclusivity, before expense is incurred.
- 02
Due diligence
Corporate, financial, contract, employment, lease and liability review.
- 03
Definitive agreement
Asset or equity purchase terms, representations and post-closing protections.
- 04
Closing and integration
Consents, filings, transfers and the transition after the transaction.
General sequence only. It is not legal advice and does not predict eligibility, cost or timing in any particular matter.
Answers
Frequently asked questions
- What is the first step in buying a business?
- Evaluating the target's financials, contracts, licenses and operations, typically supported by a signed non-disclosure agreement and preliminary information request before a letter of intent is submitted.
- Is a letter of intent binding?
- Generally, most business terms in a letter of intent are non-binding, while certain provisions (confidentiality and exclusivity, for example) are typically drafted to be binding. The document should clearly state which sections bind the parties.
- How is a business acquisition usually financed?
- Common approaches include buyer cash, third-party lender financing, seller financing of part of the price, or a combination. The purchase agreement should specify what happens if financing falls through before closing.
- What if the seller misrepresented something after I close?
- This is what representations, warranties and indemnification provisions in the purchase agreement are designed to address, subject to any survival periods, caps and escrow arrangements negotiated in the agreement.
- Can I use a business acquisition to support an E-2 visa application?
- Yes, when the target is an active, operating enterprise and the investment is substantial relative to its cost and the buyer will direct and develop it going forward. The purchase structure should be reviewed against E-2 requirements before signing.
Official sources
Consult the official sources above for current rules and procedures.