One of the difficulties owners of small/medium businesses often come across when trying to sell, acquire, merge etc is finding affordable legal support. The fees of traditional corporate lawyers are often prohibitive for the smaller corporate deals. Indeed, the legal costs for any deal less than £500,000 are likely to be a significant percentage of the total value. Just recently I was informed of a business owner who was quoted £25,000 legal fees for a deal amounting to £175,000!
Open Exhibitions Ltd (OE)
OE was originally an idea for a joint venture (JV) between four businessmen who, between them, have many years’ experience in the Exhibition Services sector. OE was to provide such services as design and construction of exhibition stands, project management, content development, artwork and graphics, transport and logistics etc.
This business was already in existence prior to the JV but was consumed in a larger company owned by two of the JV partners. It was felt that the business would maximise its growth potential if it was separated and transferred to a separate company with a dedicated management team. A management team which consisted of the other two JV partners who had the experience and contacts to develop the business.
In December 2010, we were asked to advise on the legal structure and draft most of the legal documents. With a dormant company already incorporated, on the face of it, this seemed like a straightforward job. However, it involved advising on and/or drafting a complex network of documents including:
Loan Agreements; and
The JV completed on 4th January 2011 which meant we were kept busy over the Christmas break!
We were able to provide legal support at a cost that amounted to a very small percentage of the overall value of the transaction and we continue to act as legal adviser to OE.
At the end of the project David Edwards, MD of Open Exhibitions Ltd, wrote the following:
I would like to record my thanks to Richard Jenkins for his advice and guidance on the recent purchase of a business by Open Exhibitions Ltd. Richard’s professionalism and diligence was a major contribution to the completion of the purchase within a very tight deadline. His ability to identify and deal with potential problems before they arise is a key feature of his capabilities along with his clear and concise drafting skills. He consistently demonstrated legal expertise but, importantly, took a very practical and commercial approach.