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    1 Reply Latest reply on Jun 16, 2009 10:10 AM by creditmagic

    Company Buyout Questions? Help

    EntPre24 Newbie
      I am in the manufacturing business and have 10 years in my field, I
      have wanted to open up a shop for awhile now but do not have any
      capital and my personal credit is not good.

      An opportunity has arisen that is very intriguing and I was hoping I could get some advice.

      Heres the deal:

      There is a small manufactuing facility that an older owner wants to get
      out of an move on, so he is looking for someone young and experienced
      to come in and take over/buyout his company... he would stay on for
      awhile until he was comfortable that the company would be able to pay
      him for the company over the next few years. The company is currently
      not in a great position and he is at a point where he needs to sell off
      the assets or do this deal - he is totally willing to get it going
      again so he can fund his retirement. (the company is not in debt...
      just doesnt have alot of business, mostly because he is winding it down)

      Obvioulsly I need to do due dilligence and investigate the entire
      finanacial situtaion of the company, so my main question is on how best
      to set up the buyout agreement... the max he wants to be with the
      company is 2 years. Is a leverage buyout the way to go? He owns all of
      the equipment and has some receiveables.

      Also - the company is a 30 year old corporation, the name doesnt carry
      a ton of weight so I will be changing it.. should I just start a new
      corp or llc? or inherit the current corp? I wouldnt want to be liable
      for anything prior my arrival.

      To start a manufacturing company of this type would require at least
      500k so me starting one on my own is currently very far from reality..
      this is a unique opportunity where I can purchase a company without
      having to put any money down, and have owner assit in setting it up to
      be profitable and successful.

      So - can you guys give me some adivce? please ask additional questions if needed !http://smallbusinessonlinecommunity.bankofamerica.com/images/emoticons/happy.gif!
      and remember I am specifically looking for advice on how to go about
      buying out and transferring ownership in this situation. I need it to
      be very secure for me and also need to minimize his risk.

      Thanks!
        • Re: Company Buyout Questions? Help
          creditmagic Newbie
          This is a fairly simple problem, however, before you jump into arranging any purchase you need to do just what you outlined in your post. You need to know this business inside and out and be totally convinced that once you and the seller go down this road together, it will work for both of you.

          As to the purchase, that is easy, simply buy the company with a leveraged asset transaction. Our company would be very familiar with the process if you get to that point. Stay in touch and let us know how things are going. You can reach us at info@finsolamerica.com