Private Stock Acquisitions Toolkit

Resources to assist counsel in private stock acquisitions.

Practical Law Corporate & Securities

In a stock acquisition, the buyer acquires all of the outstanding stock of the target company directly from the target company's stockholders. There is less flexibility in a stock acquisition than in an asset acquisition, where the buyer can pick and choose the assets and liabilities of the target company it wants to acquire.

A stock acquisition is beneficial for a buyer wanting to buy a company as a going concern. The buyer does risk assuming unknown or undisclosed liabilities of the target company, though certain actions can help limit the effects of those liabilities. For instance, the buyer can maintain the target company as a separate subsidiary or negotiate certain contractual provisions, such as indemnities, into the stock purchase agreement.

Stock acquisitions are relatively straightforward transactions. They have fewer formalities and documents than asset acquisitions, and are generally simpler than merger transactions. However, a stock acquisition can be difficult when dealing with a large number of stockholders because there is a greater potential for holdouts and lengthy negotiations.

This Toolkit contains continuously maintained standard documents, transaction guides and checklists to help counsel manage the transaction from preliminary planning through the negotiation of the stock purchase agreement and closing of the transaction. For a comprehensive list of other available resources on this topic, see Topic: Private M&A.

 

Practice Notes

 

Standard Documents and Clauses

 

Checklists

 

Cross-border Resources

 
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