Buying or selling a vet practice, part 3

Last time, Alan Kelly looked at the due diligence and documenting stages of the buying/selling process with veterinary practices. This next article looks at practical steps to take in the run-up to completion (pre-closing) and completion itself.

The pre-closing stage will overlap with the latter period of the documentation stage, during which detailed legal and financial negotiations will be ongoing, with the outcomes being discussed, negotiated and documented by your advisors.

At this point – generally about three weeks to one month prior to the target completion date – you should have a good idea when completion will take place.

Pre-closing considerations

So, what should you be thinking about at the pre-closing stage?

• Who needs to sign, and where will that happen?
• Do third parties need to consent/sign/deliver any documents (family members, a bank, a landlord or a pension provider, for example)?
• When will you inform employees (your legal advisors will advise as to what will be required for your deal)?
• Arranging client appointments/surgery so signatories are able to attend completion (setting aside a full day would be sensible).
• Contingencies for short notice delays to the completion date – should signatories appoint an attorney to sign on their behalf just in case?
• If you are the buyer, can you transfer funds to your advisor in time for completion?
• What do you need to bring to completion (other than a pen)?

In short, it’s never too early to start planning for completion (you will have likely agreed a target date at the outset), and good advisors should guide you through the practical steps as, during the pre-closing period, the deal will need to be managed well to ensure all the plates are spinning – and none are allowed to drop.

Often, that management is undertaken by a combination of lawyers and accountants. We would always look to ensure an updated deal delivery schedule is maintained, and known and understood by all parties.

Once a deal has momentum, it can be damaging for it to be derailed by an item or process that has been overlooked.

Completion

Completion will either take place:

• at a meeting attended by all parties (the buyer, seller and their respective advisors) – a “physical completion”
• as tends to be more common now, the buyer signing documents at its advisor’s office, the seller doing likewise, and then scanned copies exchanged by email, with the principal signed documents “delivered” as agreed between the advisors – “a remote completion”

Following signing, the advisors will then arrange for funds to be transferred as agreed and any post-completion actions to be taken (such as filings with HMRC, the Land Registry and Companies House).

As a final thought, some top tips to keep in mind are:

• Set aside a full day for completion (if possible).
• Have a contingency plan in case completion is delayed by a few days.
• Make sure third parties are aware which date you’re aiming for.
• Don’t start (mentally or actually) spending the money – wait until completion happens!