Structuring the transfer of Regulatory Approvals is complicated when you are selling your company. In Deal Note® 35 we discussed the basic differences between sales structured as the sale of assets and sales structured as a sale of equity.
The two types of regulatory approvals with which we have had substantial experience transferring over the last two decades are FAA and DOD approvals. Early identification and analysis of these approvals is critical to developing the best structure for selling your company.
While every client is unique, often we find that sellers who have significant regulatory approvals will want to structure the sale of their companies through a sale of equity, rather than structuring the transaction as an asset sale. However, requiring buyers to acquire the equity of your business (rather than its assets) may have a negative impact on the offers you may receive, as certain buyers may lower their bids due to a perceived risk of claims relating to prior periods.
If you have significant regulatory approvals, we encourage you to talk with your M&A Banker and M&A attorney about this issue, long before you talk with potential buyers.
Have a great day everyone,
Bruce AndrewsPartner
