John Andrews explains how buyers can use heads of terms, deal structure, deferred consideration, and legal positioning to reduce risk when acquiring a company.
Listen to the EpisodeEpisode 167 | Runtime: 21:57 | Audio Episode
Hear John Andrews break down the legal process behind buying a business, from heads of terms to share purchases, asset purchases, deferred consideration, leases, and personal guarantees.
Three legal lessons for buyers who want cleaner deal terms and fewer late stage surprises.
Clear heads of terms can prevent late disputes over price, deferred consideration, security, personal guarantees, and the structure of the acquisition.
A share purchase keeps continuity but carries historic liabilities, while an asset purchase can reduce risk but may create extra work around staff, contracts, leases, and client transfer.
Deferred payments can protect the buyer when warranties fail, financials change, or liabilities appear after completion, especially when set off rights are written into the agreement.
This episode features Jonathan Jay's go to acquisition lawyer, John Andrews, explaining the legal mechanics behind buying a business. John focuses on why heads of terms matter so much, especially when the buyer is structuring deferred consideration, avoiding personal guarantees, agreeing security, and trying to keep the transaction moving without avoidable legal friction.
The discussion compares share purchases and asset purchases in practical terms. John explains how buying shares preserves continuity with staff, customers, contracts, leases, banking history, and credit history, but also brings the buyer closer to historic tax issues and hidden liabilities. He then sets out why an asset purchase can reduce legacy risk, while still creating extra legal work around TUPE, property transfers, contract assignment, and client notification.
The episode also covers completion accounts, working capital, seller behaviour between heads of terms and completion, and the importance of preserving value when the seller starts extracting cash or changing the balance sheet. John and Jonathan close by discussing security for deferred payments, second charges, debentures, personal guarantees, and how buyers can take stronger negotiating positions by addressing these points before the seller's lawyer raises them late in the process.
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