At Jaswal Johnston, we have helped many clients to fulfil their business strategies. That can range from raising equity to grow and expand the business, a partial exit involving a sale of a majority or minority stake, mergers and acquisitions to increase size, partial exits and full exits from the business.
We offer an all-round legal service which is backed up by our solid reputation in the market, 30 years of hands on legal experience and a growing list of satisfied repeat clients.
We are up to date with and understand the growing and ever changing landscape of eCommerce.
How Can We Support You to Buy Or Sell Your Amazon FBA Business?
We primarily support:
- Private UK eCommerce companies and individual sellers looking to sell their business to UK, US or European Aggregators
- UK eCommerce companies looking to sell their business to private equity and family offices
- US/UK/European aggregators, looking for a reliable and knowledgeable UK legal representation to help with the acquisitions of UK eCommerce companies.
- UK FBA Owners, looking to acquire smaller brands or businesses
Selling Your Amazon FBA Business to an Aggregator
Many of the clients that we have supported, have sold to aggregators in the Amazon space. The largest of these include Thrasio, Razor Group, Boosted Commerce, Elevate Brands and Perch.
How Our Approach Is Different.
We primarily support:
- We are a small, specialist team with a wide range of legal experience, spanning over 30 years.
- We understand the intricacies of the UK legal system, US and European law.
- We help you to understand the complexities of any deal, in straight forward and simple to understand English.
- We will always act in your best interests, and will negotiate on your behalf to get you the best possible deal
What will my Legal Fees be to Sell my FBA Business?
There are various factors which can affect the fees involved in selling. They will include the territories where the business operates, the types of products which are sold, the legal structure of your business, buyer(s) requirements and the number of ASIN’s, together with any existing contracts and agreements.
We have a transparent fee structure and will only charge you for the time spent on your deal.
However, typically as a guideline, the time spent on deals ranges from between £20,000 – £35,000 + VAT. We will, where possible, agree a fixed fee with you subject to certain limitations.
Do I Need to Use a Broker to Sell my FBA Business?
The short answer is no. However we have worked with clients that have opted to use brokers in the past. The buyers of your business will typically want to understand the financial workings of your business. Most UK accountants should be able to help you get your accounts in a working, legible format at which point discussions will move from the valuation stage to the legal stage.
How Does The Sale Process Work?
Client – Decides to sell their business. They will typically start speaking with aggregators / buyers directly, or contact a broker to put them in touch with a buyer.
Buyer – The buyer will request detailed financials about the business, and access to the seller account(s) to be able to verify financials and metrics.
Buyer – The buyer(s) will typically present their offer(s) to the Client, through an LOI or Letter of Intent
Client – The client will review the offers, and make a decision on the best fit for their objectives. An initial deal / term sheet is agreed.
Each side will sign an NDA.
You will then appoint a legal representative to act on their behalf.
The Buyer will present the Seller with an SPA (share purchase agreement). This is a formal legal document and sets out the offer, the price to be paid, any specific intricacies relating to the deal and any restrictions on the Sellers.
The SPA will be negotiated by accountants and legal teams and it will take several “turns” to agree a final version. There will also be other documentation to draft and negotiate including the disclosure letter to be prepared by the Seller.
When the documents are agreed, all of the documents will be signed, and the money will either be paid to us as the Seller’s solicitors or be placed into escrow.
If monies are placed into escrow, they will be released on the written instructions of the Buyer and Seller.
How Long Does The Sale Process Take?
The complexities of each deal vary significantly. Typically deals that we handle are completed end to end in 60 days. We have completed deals in shorter time periods; however each deal will need to be assessed differently.
Why You Need To Use A UK Lawyer if You Are A UK Ltd Company?
It is highly recommended if you are a UK Ltd Company to sell your business under UK law. Failure to do so, and agreeing to a US legal system can put your business and valuation at serious risk.
The main reasons why you should use a UK lawyer are:
- Cost – it is cheaper for you to use a lawyer here than use a US lawyer for such a transaction.
- There is less likelihood of you being sued and subject to legal proceedings.
- English courts award much lower damages than American courts.
- The structure of legal costs in this country means that buyers are less likely to start proceedings than they are in the United States.
Types of Purchase
Many of the US aggregators use US legal terminology to describe the types of purchase.
Asset Transfer – This is typically where the buyer buys the assets of the business but not the legal entity. For example, the stock, trademarks, brand IP and website would be purchased by the buyer. The do not purchase the physical company so would not be responsible for any tax liabilities, PAYE, staff, office or outstanding contracts.
This is the most typical type of sale for US companies, buying US companies. However we recommend against this approach for UK companies.
Stock Purchase – A stock purchase is where the shares in the business are effectively purchased. The assets of the business, stock, Intellectual Property, bank accounts, cash in the business etc would all be purchased and the buyer would take ownership of any past and future liabilities.
This type of purchase, whilst more complicated, brings significantly greater rewards for UK sellers, and is more tax efficient.