Overview
Entrepreneurs use search funds to raise money from investors interested in making private equity investments. The funds are then utilized to search for, identify, acquire, and ultimately operate an existing privately held company. Our team can help you from start to finish of this process, utilizing the breadth of experience and knowledge at the firm.
- Formation – At the start, we will work closely with you to form the fund and finance your first stage capital needs, including:
- Preparing and filing the necessary documentation to form the entity
- Identifying investors willing to commit to providing the funds initial capital needs
- Negotiating financing terms with investors, including the preparation of the fund’s formal operating agreement
- Preparing the necessary documentation for the fund’s securities offering to its investors, including subscription agreements and any required federal and state securities filings
- Search – During the actual search phase, we guide your search fund manager through the process of successfully negotiating with prospective sellers, lenders and investors, including:
- Negotiating key business terms with sellers via letters of intent
- Negotiating fair and manageable terms with senior and/or mezzanine lenders in commitment letters
- Amending or restating the fund’s operating agreement to reflect changes in the business deal with original and/or new fund investors in anticipation of the acquisition
- Acquisition – Once you’ve identified the target company and its funding, we work with the opposing counsel and your fund’s lenders and/or investors to finalize the business terms of the transaction. We’ll then help you execute and close the acquisition, including:
- Drafting and negotiating the acquisition documents, such as the purchase agreement, escrow agreements, consulting agreements, employment agreements, non-competition agreements, transition services agreements, seller notes and opinions of counsel
- Negotiating the loan documentation with the fund’s senior or mezzanine lenders and/or its investors, including loan agreements, guaranties, notes, subordination agreements, security agreements and warrants
- Negotiating the real estate purchase or lease documentation with the target company, including purchase agreements, lease agreements or licenses, escrow agreements, indemnity agreements, mortgages, surveys, environmental reports and title insurance
- Identification of tax concerns and tax planning related to the structures and methods to be used to purchase the target company
- Operation – After you’ve made the acquisition, we’ll continue to assist to ensure a smooth operational transition is made. We can handle any indemnification claims that may arise between the parties and address your corporate legal needs on an ongoing basis.
- Disposition – Most search funds are established with a long-term outlook, often no less than a three to five year time horizon. When the time is right, liquidity events will occur in the typical manner of any privately held company that goes through a merger, asset sale or stock sale. We can represent your privately-held company if you go through this type of liquidity event, and can assist your search fund in all aspects of marketing the company for sale, negotiating the terms of sale of the company and successfully closing the transaction.
