Avoiding Pitfalls That Can Jeopardize a Sale

April 12th, 2010

Avoid delay in closing your deal!

Challenge
Kaulkin Ginsberg was hired to advise an owner in the sale of his national contingency collection agency. After a competitive process among multiple qualified buyer candidates, our client came to terms with a financial buyer who was acquiring an agency for the first time.

The agency held collection licenses across the U.S. At the onset of due diligence, we knew immediately that we had to address renewing these licenses within the allotted 60 day due diligence period. If the transfer or renewal of licenses in the name of the new owner is not addressed early on in due diligence, the seller risks a delay in closing or may face receiving a partial payment of the purchase price until all of the licenses have fully conveyed to the buyer.

Solution
We worked with the buyer and seller to determine the length of time needed to get licenses in place for the new owner. A timeline was created for conveyance, ensuring that each license was renewed under the new owner/company name, and that they adhered to various strict state guidelines.

We helped the buyer understand the timing and risks associated with license transfers, thus keeping to our closing timeline. This allowed our client to avoid having to negotiate against additional deal structure in the form of an escrow payment tied to the transfer of the licenses.

By working with the right professionals to proactively address the license transfer issue, we gave the seller, management, and the buyer the ability to focus on the remainder of due diligence without delay. The end result was a successful sale.

What Can We Do For You?
If you are contemplating a sale, we provide the advice, expertise, and information you need to ensure the right transaction happens at the maximum value achievable, with an extensive track record of success in ARM transactions.

To confidentially learn more about how we can help, please contact Mike Ginsberg,  at 240-499-3800 or by email.

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