Posted by Hazel Phillips, Partner
Thinking of selling your pharmacy business? We give our top tips…
When selling a pharmacy business, the key considerations for sellers are to achieve the asking price, exit quickly and cleanly and keep professional costs down.
In order to achieve this, it is vital that sellers are well-prepared with compliant and complete documentation. Our experience has shown that very often the same issues crop up resulting in delays, additional costs and opportunities for buyers to re-negotiate prices and request retentions. To increase your chances for a smooth process- plan ahead!
Plan Ahead- Top Tips
- Appoint a crack team! If you want your sale to move quickly and to ensure you are protected from any post-sale liability, it is sensible to appoint pharmacy tax and legal specialists. They will know how to help you prepare for and structure the sale and help anticipate and overcome any bumps in the road. Choose people you have a rapport with. You will be talking to them frequently during the process!
- Share or Asset Sale? In an asset sale, you sell the pharmacy business, including its equipment,stock, NHS contract, property and goodwill. This will involve a change of ownership application. In a share sale, you sell the shares in the company which operates the pharmacy. No change of ownership application is needed but the buyer takes on all the assets and liabilities of the company. If the business is owned by a limited company, it is likely to be more tax efficient to sell the shares in the company, rather than the business as a going concern. Your tax and legal advisers can work with you from the outset to ensure your sale is structured to meet your tax position.
- Agree the key terms. Once you have accepted an offer, it is sensible to agree a short “heads of terms” document with the buyer. This will help set expectations for the timescale and structure of the sale and will cover price, financial structure, timescales, confidentiality of your information and whether you are willing to offer an exclusivity period.
- Due diligence. This is a vital part of any sale process but can drag on if sellers are not prepared. Ensuring that you have a complete package of documents ready at the outset can save you time, legal costs and reduce opportunities for the buyer to re-negotiate. A good pharmacy lawyer will be able to provide you with a checklist of the documents the buyer will require so you can obtain any missing information and complete any gaps before the process starts.
- Tidy up your financial records: Time to visit your bank managers and accountants- ensuring your financial records and information are up to date is imperative and again, can help reduce opportunities for the buyer to renegotiate the price.
The key to any successful sale is planning- getting the right professional advisers on board from the outset will ease the stress.
Whichever sale option you consider, there are many aspects you will need to think about including, corporate governance issues, audit of commercial and NHS agreements, employees, any property issues and any regulatory issues. If you would like advice to help guide you through the sales process our Healthcare Team has the relevant lawyers and professional contacts to assist you.
For more information please get in touch with Hazel Phillips or another member of our Healthcare Team on:
0800 182 2495 Email us
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