Asset vs stock purchase

Member resources:

Frequent asked questions:

What is Searchfunder.com?

Searchfunder.com is an online community of searchers, investors, lenders, brokers and other professionals. Over 80% of those involved in searchfunds maintain a Searchfunder account to help them network, hire, and mentor others.

What are the benefits of membership?

In addition to accessing the most active online network of business buyers, Searchfunder licenses research that is simply not cost effective for individuals. Access over 15,000 industry reports and 50,000 transaction financials. You also get monthly credits for contact information for your company sourcing campaign with the option to purchase more at drastically discounted rates. Searchfunder has pre-purchased access from these data providers in order to empower individual buyers and to help searchers level the playing field versus private equity.

Do you have deals?

While we are primarily a buy-side network, we do have hundreds of brokers that regularly post deals to the community.

Can I find an internship on Searchfunder?

Absolutely! We have the industry's largest intern job board. If you are considering a search, the first step is to help another business buyer so you can hit the ground running.

What does it cost?

Searchfunder is a subscription service. We offer flexible monthly, annual and lifetime memberships.

Monthly

$79 / month

Annual

$19 / month

Lifetime

$432 / once

Those who maintain an account with us for over 4 continuous years are permanently added to the community without the need for a membership.

Do I need an MBA to join?

While a large number of our members come from dedicated programs at Harvard Business School, Stanford GSB, Chicago Booth, and other top programs, searching is no longer reserved for the elite. With the current abundance of dry powder in private equity, and an increasing number of business owners reaching retirement age, good deals rarely go unfunded.

Post a question, deal, job, etc...

Make a post...

Complete registration to post.

by a searcher from University of Washington
in Seattle, WA, USA

2yrs ago

Asset vs stock purchase

What are the pros and cons of an asset sale vs stock sale? And in what situation would you consider one over the other?

From what I have gathered, asset sales seem better suited for bolt ons and anything with questionable due diligence. Outside of that it seems like a stock sale provides multitudes of benefits as long as the business has had a clean history/reputation.

In hindsight do you have any regrets doing one vs the other?

0 Likes

394 Views

reply by an intermediary 1yr ago
from City University of New York (CUNY) System in Wesley Chapel, FL, USA

First things first, to guard your interest, determine if there even NEEDS to be a stock consideration. Example, does the seller have government contacts tied to their TIN? If so, beware, because an asset sale cannot transfer those contracts. Otherwise, consider all the facts, and if you want a stock sale but need the step-up basis of an asset sale, I agree with other, consider 338(h)(10) or 338(e). Seller may still balk though at the tax treatment.

reply by a searcher 1yr ago
from University of Washington in Seattle, WA, USA

There can be tax benefits for the buyer in asset sales. And Seller tax benefits for stock sale. Depends on individual financial situations but in general take that into consideration when determining price. It's not always about the listed price but list price minus taxes.