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SME Acquisitions - When should you pull in the accountant?

Once you have made the decision to make an offer to invest in, or acquire, an SME you are probably past the point at which your accountant should be brought in to the process. Not only can the accountant provide sound advice on the ‘corporate finance’ aspects (for example the valuation, key terms etc), it is crucial to set an appropriate structure from a commercial and taxation perspective. 

This is particularly important in distressed situations. Mercer & Hole have recently advised on a distressed management buy out – under the initial terms, the acquirers were effectively taking on all old group liabilities (even though the majority did not relate to the division in question). This is clearly not an acceptable approach – and after several calls / emails the deal was very different. 

Beware of sellers that say ‘we can do this without the accountants and lawyers’ – they are likely to have their own interests at heart…

 

 

Date: 9th March, 2009
Author: Julian Dobbin

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