Areas of expertise

Navigating a Leveraged Buyout

When exploring the possibility of a leveraged buyout, you need sound legal counsel to guide you through the process. At Carlile Patchen & Murphy LLP, we represent leveraged buyout clients by setting up the framework for the transaction, negotiating terms, and executing the transaction as part of our business transaction services. If you are exploring this avenue, we are here to provide our expertise with leveraged buyouts.

Leveraged Buyout for Sellers

For a seller, a leveraged buyout can be a beneficial vehicle for selling a business or part of a business because the deal is structured to provide the financial return that the seller needs to make the transaction worthwhile. Having experienced legal counsel to guide you ensures your interests are protected, and the transaction is executed smoothly.

Leveraged Buyout for Buyers

A leveraged buyout allows a purchaser to buy a business entity without significant personal expense and capital output. It often relies on outside capital to fund the purchase, such as private equity, bank financing, or other forms of investment capital. Having an experienced legal team on your side ensures that the buyout is structured correctly to protect your assets.

Components of a Leveraged Buyout

Leveraged buyouts can be complex, which is why we have a dedicated team of experts to counsel you through the transaction. We help buyers or sellers in a leveraged buyout in the following ways.

Negotiate Terms of the Transaction

As with any business transaction, negotiating the price is the first step in entering a leveraged buyout. Your CPM attorney will help draft a Letter of Intent (LOI) that secures the terms of the sale and protects both sides from a breach of contract. That LOI is then used to guide drafting a purchase agreement that lays out the terms of the sale.

Preparing for Due Diligence

Another step in a leveraged buyout is due diligence, which the buyer will do to ensure they are getting the value they are paying for. Our team can help prepare both buyers and sellers for the due diligence process, including the types of records, documents, asset inventory, and other information needed to satisfy both parties.

Tax Considerations

The sale of a business, regardless of the transaction type, has tax implications for both buyer and seller. Our team of business transaction attorneys can provide a tax strategy to maximize the transaction’s benefits for either party.

Provisions of the Sale

If the purchase agreement involves future payments to the seller, a provisional agreement laying out the payment terms is an integral part of a leveraged buyout. Our legal team will ensure that the deal is airtight and provides accountability for the party we represent.

Liabilities and Indemnification

Each party to a leveraged buyout will assume liabilities. A clearly stated purchase agreement outlines who is responsible for what aspects after completing the sale. Indemnification Provisions provide guidelines for compensation in the event of a contractual breach of the liability agreement.

Put Our Leveraged Buyout Experience on Your Side

If you are exploring a leveraged buyout opportunity as a buyer or seller, CPM can help guide you through the process. Our experience guiding clients through leveraged buyouts can provide you with peace of mind as you explore your options. To get started, schedule a consultation with one of our business transaction attorneys or call our office to schedule an appointment.

How can we help you today?

Give us a call or send a message with any inquiries and legal questions.


Contact us