Glossary - Third Party Acquisition
Third Party Acquisition refers to the purchase of a company or its significant assets by an external party that is not currently affiliated with the company. This process involves the sale or transfer of ownership from the current owners to an unrelated third party, which can be a company, group of investors, or an individual. This is a common method for business owners to exit their investment or for companies to strategically expand their operations or portfolio.
Also known as
- Buyout
- External Acquisition
- Corporate Takeover
Use cases examples
- Share Purchase Agreement: The Share Purchase Agreement outlines the terms and conditions under which the third party will acquire all issued and outstanding shares of the Company.
- Asset Purchase Agreement: According to the Asset Purchase Agreement, certain assets of the Company will be sold to a third party, enabling the third party to leverage these assets for operational purposes or integration into their existing business.
Considerations for investors
- Performing thorough due diligence to uncover any potential liabilities or risks associated with the acquisition.
- Evaluating the strategic fit of the acquisition with the existing portfolio or company strategy.
- Assessing the potential for value creation through synergies with existing operations.
Considerations for founders
- Understanding valuation methods to ensure a fair price for the sale.
- Considering the implications of the sale on existing employees, customers, and stakeholders.
- Negotiating terms that may include post-sale involvement or non-compete clauses.
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