HVAC under LOI. Any DD or Transition Advice?
December 02, 2024
by a searcher from Louisiana State University - E. J. Ourso College of Business in Baton Rouge, LA, USA
Hello everyone,
Exciting news! I'm currently under LOI for an HVAC company and am beginning the due diligence process. Does anyone have experience on where I should focus during due diligence? Any red flags to watch out for or key metrics that are particularly important?
I'd greatly appreciate hearing about your experiences during the transition phase. What strategies worked well for you, and what lessons did you learn that could help ensure a smooth ownership change?
Thank you in advance
Best regards,
Nick
from University of Notre Dame in New York, NY, USA
A few things to focus on from the legal side:
(1) licensing/ regulatory requirements - you want to make sure you can operate the business post-closing and blue-collar businesses are always trickier to transfer/assign licenses (you'll need a license qualifier);
(2) employee classification - if these workers are 1099s, you want to make sure they are actually classified correctly, otherwise there's major post-closing tax liability risk;
(3) long term supplier/customer contracts - if this HVAC business has large commercial clients, then you want to make sure you don't need pre-closing consents to assign those contracts (same idea if it's a stock sale with change of control provisions).
That's just a flavor - but would be happy to discuss (I do a ton of these deals). My email is redacted or shoot me a DM.
from University of Miami in New York, NY, USA
https://calendly.com/petigara-law-group/meeting-with-vishal-petigara
Vishal S. Petigara, Esq. Klintworth & Rozenblat, LLP Office: +###-###-#### , ext###-###-#### Mob: +###-###-#### Email: redacted http://www.kandrip.com/