Sale of business nets $100 million and new debt structure

Sale of business nets $100 million and new debt structure

On Behalf of | Oct 4, 2013 | Uncategorized |

Running a business is often a complex endeavor. Knowing when and how to pursue the sale of business can be even more complicated. Business owners large and small obviously want to get the best return on their investment when selling their business, especially when they have worked hard to build it from ground-level, and it can be difficult knowing exactly how to do this. A smart plan and contract for the sale can produce significant financial reward for a savvy business owner, however.

Affirmative Insurance Holdings, Inc., a large distributor and producer of personal automobile insurance policies with several locations throughout Louisiana and numerous other states recently sold its retail agency distribution business. The buyer is Confie Seguros and the selling price was $100 million in cash. In addition to these initial cash proceeds, the seller may receive an additional $20 million if certain capital thresholds are met. The recent sale also affected the debt arrangement of the selling company in a positive way.

When businesses, debt arrangement, profit structures and large amounts of money are involved, the process of making a sale can be overwhelming. There are numerous details to pay attention to and failure to account for something or contractually provide for an event can break a deal or create significant hurdles to a closing.

In addition, even if the sale process itself appears to go smoothly, problems can arise after the sale because there are so many elements of business transactions. Potential difficulties could include breach of contract, evictions, problems with titles and other issues. An experienced real estate attorney can help in many stages of this process. Negotiating a successful and legal contract that provides for a range of contingencies can be a good step in preventing problems from the outset. Should later problems arise, however, a skilled attorney can help resolve conflicts and disputes through litigation.

Source: Global News Wire, “Affirmative Insurance Holdings Closes Sale of Retail Agency Business and New Debt Financing,” Sept. 30, 2013