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Selling a Business: Anatomy of a P&S Agreement

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By David Hoffer, Mirus Capital Advisors 
 Authored by my partner, David Hoffer, this article (LINK: http://www.merger.com/admin/research/uploads/Mirus%20Capital%20Advisors_2008_July_VP_Issue%2031.pdf demystifies the contents of purchase and sale (“P&S”) agreements.  This viewpoint will help you be better prepared to analyze your own P&S effectively and understand what portions require the most attention.

Key Take-Aways:

  • Understanding the framework of a P&S will prepare you to focus on the issues that will have the biggest impact when you sell your company.
  • Making sure you fully understand how various risks are allocated in your P&S agreement will help you avoid nasty surprises after the sale has been completed.
  • The negotiation process can become emotional for sellers; having a good understanding of the types of issues that might arise in advance may help you keep the process in perspective and your emotions in check.