Glossary - Trade Sale
A trade sale is the sale of a company's shares or assets to another company or commercial buyer. It often represents an exit strategy for the company's investors and founders, allowing them to realize the value of their investment. Trade sales are common in the business world, particularly in the startup ecosystem, where they may be seen as an alternative to going public through an initial public offering (IPO).
Also known as
- Company sale
- Corporate divestiture
- Business sale
Use cases examples
- Acquisition Agreement: The Acquisition Agreement, executed on [Date], between [Your Company] and [Acquirer Company], outlines the terms and conditions under which the entirety of [Your Company]'s issued and outstanding shares will be acquired by [Acquirer Company], constituting a complete trade sale.
- Share Purchase Agreement: In accordance with the Share Purchase Agreement dated [Date], the Sellers hereby agree to sell, and the Buyer agrees to purchase, the Sale Shares, representing 100% of the company's issued share capital, in a trade sale transaction.
Considerations for investors
- Evaluating the strategic fit and potential synergies of the acquiring company to maximize return.
- Conducting thorough due diligence to identify any legal or financial risks before completion of the trade sale.
- Assessing the impact of the sale on the investor's portfolio and overall investment strategy.
- Negotiating the sale terms to include protective provisions and ensure a favorable exit.
Considerations for founders
- Ensuring the deal aligns with both the financial and strategic objectives of the founders.
- Negotiating favorable terms to safeguard the interests of the founding team and employees post-sale.
- Understanding the tax implications of the sale to optimize net proceeds.
- Managing the transition process to minimize disruption to the business and its stakeholders.
Get to know our world class tools and services
Transform your operations with world class tools
We have created several tools to help investors spot the best opportunities and manage their portfolio.
Let's unlock your business potential with Automations
Embrace the future with our tailored subscription service that combines strategic planning and practical implementation.