Case Study: Business Sale and Purchase – Supporting a Strategic Acquisition

Client Background

Eweka and Associates was retained by a UK-based client looking to acquire a technology start-up in Nigeria to expand their portfolio and leverage innovative digital solutions. This acquisition was structured as an asset purchase to enable the client to acquire selected assets, including intellectual property (IP), customer contracts, and technology infrastructure, while avoiding liabilities from the seller's existing debts.

Project Objectives

1. Due Diligence: Conduct a thorough investigation of the target business’s assets, contracts, and potential liabilities.

2. Drafting and Negotiation of the Purchase Agreement: Prepare a comprehensive asset purchase agreement tailored to the transaction's scope.

3. Employee Review and Transition Support: Assess and structure the employment terms of key staff members to support continuity and protect the client’s new acquisition.

4. Intellectual Property (IP) Registration: Confirm the ownership and registration of critical IP assets and secure any additional registrations required.

Results and Client Impact

1. Successful Transfer of Assets: The asset purchase agreement was successfully executed, allowing the client to acquire the essential assets of the target business, including technology and IP, without inheriting any liabilities.

2. Retention of Key Employees: The employment transition strategy was executed smoothly, retaining critical employees who provided continuity and technical expertise, which was instrumental in integrating the acquired assets.

3. IP Protection and Competitive Advantage: By securing ownership of the target’s IP assets and registering any unregistered IP, the client gained a significant competitive advantage and peace of mind, knowing their new assets were fully protected.

4. Streamlined Compliance and Reduced Risk Exposure: The client was able to navigate the complexities of cross-border acquisition with reduced risk, benefiting from Eweka and Associates’ knowledge of regulatory compliance in both the UK and Nigeria.

Client Feedback

The client commended Eweka and Associates for delivering a smooth transaction process, supporting their strategic goals, and handling complex cross-border legal requirements. The tailored approach to due diligence, IP protection, and employee management allowed the client to focus on post-acquisition growth, confident in their legal foundation.

This case study highlights Eweka and Associates' expertise in business sales and acquisitions, showcasing our commitment to seamless and legally sound transactions that prioritize our clients' objectives and operational continuity.

Approach and Execution

1. Due Diligence Review:

   • We conducted an in-depth legal and financial review of the seller’s business, including an assessment of contracts, assets, intellectual property, employee obligations, and liabilities.

   • Our team identified key areas of concern, including unregistered trademarks and contracts that lacked assignment clauses, which could potentially restrict the client’s ability to use certain assets.

   • A report was prepared, highlighting these areas along with recommendations to address each before finalizing the acquisition.

2. Drafting and Structuring the Asset Purchase Agreement:

   • We prepared a tailored asset purchase agreement that outlined specific terms of sale, including clear delineations on assets included in the transaction, the transfer of intellectual property, and any warranties from the seller.

   • The agreement included clauses to protect the buyer, such as indemnities covering undisclosed liabilities and warranties for intellectual property ownership and employee rights.

   • We also structured a payment plan to allow for deferred payments conditional on the completion of certain milestones and the successful transfer of assets.

3. Employee Review and Employment Transition Support:

   • Since the client was interested in retaining a few critical employees, our team reviewed current employment contracts, benefits, and potential restrictive covenants to support a smooth transition.

   • We worked with the seller to negotiate and prepare employment contracts for key employees, ensuring continuity in operations and minimal disruption post-acquisition.

4. Intellectual Property (IP) Verification and Registration:

   • The target business owned valuable IP, including proprietary software and trademarks. We verified ownership and reviewed licensing agreements with third parties to ensure that IP would transfer without complications.

   • Since some IP assets were unregistered, we completed the registration process on behalf of the buyer, ensuring all critical IP was legally protected and owned by the new entity post-acquisition.

5. Regulatory Compliance and Documentation:

   • Our team coordinated the necessary filings to comply with regulatory authorities in both the UK and Nigeria.

   • We also prepared a disclosure letter to document all known risks, liabilities, and due diligence findings, allowing the client to make a fully informed decision.