The client owned a busy tyre-fitting business, with annual sales in the band £250k to £500k, trading from well-positioned premises. It was a division of a larger parent company, operating in an associated sector, which decided to sell it in order to focus on its core operations.
The preparation of the sales details and the due diligence stages were made more difficult by the lack of reliable divisional accounts. The search for a buyer was complicated by the seller’s wish to sell the property as well as the business. Many sets of details were requested but there were very few potential buyers of sufficient quality.
For the eventual buyer, the acquisition represented an entry into a new sector alongside a portfolio of commercial properties. The legal stages were extraordinarily extended in this case as the Heads of Terms were signed in May 2009. The credit crunch was a significant component of the delay in the latter stages as the purchaser required a mortgage. A great deal of time and effort was required to keep the deal live particularly as the seller, understandably, found the delays very wearing. A second buyer was in the background but, in reality, their offer was less attractive.