Case Study: Restaurant Business Acquisition

Overview

KTS Legal recently acted on the sale of a well-established restaurant business, structured as a 100% share purchase so the business continued to trade as a going concern throughout. Alongside the corporate transaction, our property team negotiated and completed the lease of the restaurant premises, and our immigration team handled the sponsor licence requirements triggered by the change in ownership. Three workstreams, one co-ordinated timetable, and a completion that did not interrupt trading.

The brief

Our client, the owner of the business, had agreed to sell the entire issued share capital of the restaurant’s operating company to a buyer acquiring through his own company. The buyer needed the premises, the brand and the team to carry on exactly as before. That meant the share sale could not be looked at in isolation. The lease of the premises and the company’s Home Office sponsor licence mattered as much to the deal as the share purchase agreement itself.

The share purchase

Our corporate-commercial team ran the transaction from heads of terms through to completion. Our work included:

• negotiating the share purchase agreement, including the warranties, the limits on the seller’s liability and the completion mechanics;
• managing the buyer’s due diligence enquiries and preparing the disclosure letter;
• dealing with the practical points that matter in a trading business, such as the handover of bank mandates and the company’s registered intellectual property;
• preparing the stock transfer forms, completion documents, board minutes and Companies House filings.

A share sale keeps the company, its contracts and its workforce in place, which is what allowed the restaurant to change hands as a going concern.

Securing the premises

For a restaurant, the premises are the business. Our property team negotiated the lease with the landlord and its solicitors, working through the key commercial terms including rent, term, repairing obligations, permitted use and the restrictions on assignment and underletting. The lease was completed in step with the share purchase. The buyer took over a business whose premises were secured from day one, with no gap between the two transactions.

Sponsor licence and the change of ownership

Many restaurants rely on sponsored skilled workers, particularly in the kitchen, and this business held a Home Office sponsor licence. A change in ownership brings strict reporting duties and often changes to the people named on the licence.

Our immigration team advised on exactly what the change of ownership required. We prepared and submitted the necessary applications and notifications to the Home Office within the required timescales, and made sure the new owner’s key personnel were properly in place on the licence.

This protected the licence, and with it the employment of the sponsored staff, throughout the transition.

The outcome

The sale completed with the lease in place and the sponsor licence requirements fully addressed. Our client achieved a clean exit, and the buyer took over a trading restaurant with its premises, brand and team intact.

Because one firm handled all three workstreams, issues raised in one were resolved with the others in mind. The client had a single point of contact throughout, rather than three sets of advisers to co-ordinate.

How we can help

At KTS Legal, we have dedicated corporate-commercial, property and immigration teams who work side by side to handle and co-ordinate business purchase and sale transactions seamlessly, from heads of terms to the final Home Office notification.

As well as hospitality and restaurants, we act for buyers and sellers across a wide range of sectors, including retail, nurseries and childcare, healthcare and care homes, travel and logistics, technology, manufacturing and engineering, property development and professional services.

If you are planning to buy or sell a business, get in touch with our team to discuss how we can help. Give us a call at 020 8367 0505 or send us an E-mail at info@ktslegal.com and a member of our team will reach out.