The Background
Roberts Crosbie Mortensen was initially sought out by a software developer to advise in relation to an Information Memorandum and Disclaimer seeking expressions of interest in relation to the purchase of a profitable software business worth approximately $6 million that the client and others had developed following a small joint venture years earlier.
There was no Partnership Agreement between the four (4) owners of the business.
The business was significantly dependent on other software that the client had developed and licenced separately to the business via a related company.
The client received several key Expressions of Interest and was negotiating with two (2) likely purchasers each being large public companies.
The client sought advice from Roberts Crosbie Mortensen in relation to the terms of the offers and the negotiations generally. Heads of Agreement were signed and the client sought to instruct Roberts Crosbie Mortensen to act on behalf of the four (4) business owners and the related software company.
How We Helped
Roberts Crosbie Mortensen identified the potential conflict of interest and increased risk for the owners due to the absence of any Partnership Agreement. Roberts Legal gave general advice and obtained the informed consent to act for relevant vendors.
Roberts Crosbie Mortensen acted in relation to the formalising of a period exclusivity under an Exclusivity Agreement that ensured that the owners’ legal costs would be paid by the prospective purchaser if a Business Sale Agreement was not subsequently entered into.
Roberts Crosbie Mortensen advised further in relation to the purchaser’s due diligence and the negotiation and drafting of a Business Sale Agreement and all related agreements including a Retention, Vendor Warranties, Intellectual Property Assignments, Fixed Term Employment Contracts, Fixed Term Subcontractor Agreements and the assignment of Key Client Contracts.
The Outcome
The sale price of the two (2) businesses was over $6million.
The sale was completed without incident and the retention fund received in full only 12 months later.
