Caps and Baskets: How Buyers and Sellers Negotiate Risk in a Business Sale
A beautifully drafted set of seller promises is worth very little if the cap is too low to recover under or the basket is structured so you can never reach it. This…
We represent buyers and sellers in transactions involving established Texas companies, from manufacturing, distribution and aerospace and defense to healthcare, professional services, technology and the trades, most valued between $2 million and $25 million.
Our buyer clients include private equity-backed platforms, strategic acquirers, independent sponsors and owner-operators using SBA financing. Our seller clients are founders and family owners, often selling to those same buyers and sometimes keeping a stake in what comes next. On either side, rollover equity, reorganizations before closing, layered acquisition financing and negotiated indemnification are a regular part of our work.
Deals We Handle
Asset Purchases
The most common structure for small business deals. The buyer acquires the assets it wants, and most liabilities stay with the seller.
Stock and Membership Interest Purchases
Purchases of the company itself, often used when licenses, permits or key contracts are hard to transfer.
SBA-Financed Acquisitions
Purchases funded with an SBA 7(a) loan, with deal documents built around the lender's requirements.
Seller-Financed Deals
Promissory notes, security agreements and the right to offset valid claims against note payments.
Partner and Shareholder Buyouts
One owner buying out another, through the company or directly, on clear payment terms.
Mergers and Rollovers
Combinations of two companies, and deals where the seller keeps a stake in the buyer after closing.
Representing Buyers
For buyers, we structure the purchase, run the legal side of due diligence, negotiate the purchase agreement and coordinate closing with the lender and the seller's team. We look hardest at the issues that are expensive to fix later: liens, unpaid sales or franchise taxes, contracts that can't be transferred without consent, and leases that won't survive the sale. Learn more about buying a business.
Representing Sellers
For sellers, we help prepare the company before it goes to market, review offers and letters of intent, manage the buyer's diligence requests and negotiate the terms that decide how much of the price the seller keeps: the representations, the limits on indemnification, the seller note and the non-compete. Learn more about selling a business.
How We Structure and Close Deals
Deal Structures
Asset purchases, stock purchases, membership interest purchases and partner buyouts.
Financing and Buyers
SBA loans, seller financing, earn-outs, rollover equity, sales to private equity and search fund and independent sponsor deals.
Each Stage of the Deal
The letter of intent, due diligence, the purchase agreement and closing.
Franchise Locations
Buying or selling a franchise unit, including the franchisor's approval and the new franchise agreement.
Businesses We Help Buy and Sell
How a Deal Comes Together
Letter of Intent
Price, structure and timing are agreed in principle, and confidentiality and exclusivity become binding.
Due Diligence
The buyer's CPA tests the financials while we check liens, litigation, taxes, licenses and approvals, and whether key contracts can be assigned or end on a change of control.
Purchase Agreement
We draft or negotiate the agreement and its schedules, which set the representations, indemnification and closing conditions.
Closing
Signatures, lien payoffs, lender funding and the transfer documents come together, usually on a single day.
Transition
The seller trains the new owner, accounts and contracts move over, and any seller note payments begin.
Frequently Asked Questions
Have a question that isn't answered here? Call us at (817) 631-8842 or send a message.
Ask a QuestionWhat size deals do you handle?
Most of the businesses we help buy and sell are valued between $2 million and $25 million, a range often called the lower middle market. We also handle smaller purchases and larger, more structured transactions.
Do you represent both the buyer and the seller?
No. We represent one side in each deal. If the other side doesn't have an attorney, we recommend that they hire one, because we can't advise both parties.
Do you handle stock purchases and mergers, or only asset deals?
We handle all three. Asset purchases are the most common structure for small businesses, but stock purchases, membership interest purchases, mergers and rollover deals come up often in our practice. Our article on asset purchases and stock purchases explains the tradeoffs.
Do you work with business brokers, CPAs and lenders?
Yes. Most of our deals involve a broker, the client's CPA and often an SBA lender. We coordinate with each of them so the legal documents match the business terms and the lender's conditions.
More in Business Acquisitions
- Buying a BusinessStructure, diligence, negotiation and closing for buyers.Learn More
- Selling a BusinessPreparation, negotiation and closing for owners selling their companies.Learn More
- Asset PurchasesBuying or selling a company's assets while the seller keeps the entity.Learn More
- Stock PurchasesBuying a corporation's shares, with its contracts and its history intact.Learn More
- Membership Interest PurchasesBuying an LLC's ownership under a membership interest purchase agreement.Learn More
- Partner BuyoutsBuying out a co-owner, or selling your stake, on clear terms.Learn More
- SBA-Financed AcquisitionsPurchase agreements and closings built around SBA 7(a) lender requirements.Learn More
- Seller FinancingSeller notes with clear payment terms, security and remedies for both sides.Learn More
- Earn-OutsContingent price terms defined clearly enough to measure, report and pay.Learn More
- Rollover EquitySellers reinvesting in the buyer, on terms that protect the stake they keep.Learn More
- Selling to Private EquityRepresenting owners who sell to private equity firms and PE-backed platforms.Learn More
- Search Funds and SponsorsVehicles, investor terms and acquisitions for searchers and independent sponsors.Learn More
- Franchise ResalesBuying or selling an existing franchise location, with the franchisor's approval.Learn More
- Letters of IntentSetting the price, structure and key protections before the deal is drafted.Learn More
- Due DiligenceFinding the legal issues in a business before the buyer owns them.Learn More
- Purchase AgreementsThe negotiated terms that decide who carries the risk in a business sale.Learn More
- Closing an AcquisitionChecklists, payoffs, funds flow and the follow-up that finishes a deal.Learn More
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