Overview
A Toronto-based SaaS company with four shareholders received an approach from a European software group. The founders had never sold a company before and needed counsel who could run the process without derailing day-to-day operations.
Challenge
The acquirer’s initial term sheet buried a significant holdback, restrictive covenants that would have prevented the founders from working in their own industry for five years, and a purchase price adjustment mechanism that shifted most diligence risk onto the sellers. Two of the four shareholders had no prior legal representation, and employee retention through closing was critical to the deal’s value.
Approach
We ran a structured process: renegotiated the holdback down and tied it to specific, measurable post-closing obligations; cut the non-compete to a commercially reasonable two years with a carve-out for general industry work; replaced the open-ended price adjustment with a defined list of adjustments and a collared mechanism. In parallel we prepared a single clean shareholder approval process and key-employee retention agreements aligned with the acquirer’s escrow.
Outcome
The transaction closed in under four months at an improved effective price after the renegotiated holdback and adjustment terms were factored in. Both unrepresented shareholders received independent summaries of the deal terms, and all four founders stayed on through the transition period by choice, not obligation.
Related practice area: Business & Corporate Law
Portfolio demo notice: this matter is a fictional demonstration created for a portfolio site. It does not describe a real client or real legal outcome.