Corporate acquisitions are predominantly structured by means of buying and selling shares in the target company (or: the target), by the seller. The buying party thus takes over the entire company, including debts. In order to ensure clarity and avoid discussions, parties stipulate the conditions under which the share transaction takes place in a purchase agreement - also known as a Share Purchase Agreement (SPA).
Asset transactions
In specific cases, it makes more sense to acquire only certain business units, also known as assets. The terms are set out in an agreement to buy and sell certain assets, known as an Asset Purchase Agreement (APA). This provides flexibility for the buying party, who can determine which specific assets (such as machinery, inventory, stock, etc.) it wishes to acquire by way of 'cherry picking'.
Heron Legal understands the importance of accuracy and clarity in transactions. Besides drafting and reviewing model purchase agreements, Heron Legal alsooffers tailor-made solutions in which your specific interests as a buyer orseller are best served. Regardless of whether an SPA or APA is involved, HeronLegal is ready to support you.
In this article, we highlight three cases in which advisors were accused of failing to exercise the care expected of a competent contractor during an acquisition process. Failure to meet this duty of care can result in the advisor (or the firm they work for) being held liable for damages to the client. Advisors, particularly in an acquisition process, face significant liability risks.
