Everything you need to know about drafting up a buyout offer and bringing in external expertise

Published: 17-May-2023

Law firm Freeths explains how and when drawing in experts from outside your business could help deliver a successful buyout offer

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This article was written by Rebecca Howlett, Partner and Head of Beauty and Personal Care, and corporate lawyer Tatsuki Shiratsuchi, at law firm Freeths.

As the retail and beauty sectors continue to evolve, strategies and approaches to buying companies must also adapt to keep up with these rapid changes. 

In these industries where competition is fierce and market conditions can fluctuate quickly, a successful buyout offer can make all the difference in securing an acquisition at the right price and time. 

But knowing how and when to bring in outside expertise to assist with preparing an effective buyout offer is key.

Companies must be particularly attuned to the changing consumer trends and demands, as well as pricing pressures and competition from other retailers and brands, to remain innovative, profitable and successful. 

Adding the volatile market conditions impacted by macroeconomic factors, such as increasing taxes, rising inflation rates and changes in exchange rates, these industries can experience significant fluctuations in demand and revenue. 

Do I need to involve external experts in a buyout offer?

Your business is successful as you have a team of experts involved in every aspect of it, but there are some areas which will be outside the skill set of your organisation because they are not part of the day-to-day fabric of your business. 

It is when you touch on these areas that you need to instruct experts – businesses who deliver on this work day-in-and-day-out and know the trends and markets. 

Some key areas where external expert advice is vital include legal advice, due diligence investigations of the target company (most commonly legal, commercial, financial and tax), financial analysis, strategic counsel and post-merger integration.

A legal team can also give advice on the transaction structure, assist with the preparation of the offer letter, and once the offer has been accepted, negotiate and draft the acquisition agreement.

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