Purchases
Exclusivity
You should negotiate an exclusivity period, which would essentially give you the comfort of knowing that the seller is not offering / negotiating the sale of the pharmacy to any third-party buyers whilst your solicitors are conducting due diligence. Sellers often require a holding deposit in exchange for securing the exclusivity period. Although a seller may insist otherwise, the holding deposit should be refundable, in case your advisors come across any issues with the pharmacy during the due diligence process which results in you wanting to pull out of the transaction.
The property
If you are buying with the assistance of a bank loan, the pharmacy’s property will likely be a key security asset for your lender. Therefore, it is important that your solicitors conduct thorough due diligence on the property to ensure that the seller / landlord has good title to it and that there are no issues, such as onerous restrictive covenants which require remedial action.
Where the pharmacy operates from a leasehold property, it is vital that the lease is reviewed to ensure that you are aware of the rent, frequency of payment, rent review provisions, length of the term and other key conditions in order to assess whether they are viable to you (and your lender if applicable).
Employees & Pensions
You’ll need to detail existing employees, their contract stipulations and hours worked. This is part of a process aimed at protecting employees from changes that may affect the working lives they have contractually agreed to. As part of this, you’ll also need to detail any pension schemes operated by the company – which includes contributions as well as the steps you’ve taken to comply with pension auto-enrolment.
Insurance
You’ll need to outline any insurance arrangements in place, as well as provide evidence of any policy documents, premium receipts or certificates. You’ll also need to evidence any claims made under the policies within the past two years, including any which are currently outstanding.
Pharmacy goodwill
Business goodwill is an intangible asset that adds value to a company. It is built up over time and is the value given to its good name and reputation. This can include for example intellectual property and brand recognition which is reflected in the goodwill. The price of the pharmacy is calculated by applying the EBITDA profits, this stands for earnings before interest, tax, depreciation and amortisation. Therefore, the higher the EBITDA profits the higher the valuation of the business.
Material contracts
Careful enquiries will need to be made of the pharmacy’s material contracts such as the NHS contract (i.e. the pharmacy’s presence on the Pharmaceutical List) and key supplier contracts which are imperative to the running of the pharmacy. They will need to be reviewed to ensure that they can be transferred to you and do not contain any termination provisions that would be effected on completion of the transaction.
Accounts
The solicitor will need to audit the full accounts of your company and will need to see any notes added to the accounts. This includes the director’s reports and must extend for at least three financial years. This also includes dividends and distributions made by the company since the last audited accounts.
All other relevant financial information such as FP34’s, management accounts and financial statements should also be provided.
Included within this area is the future-facing budget and forecast elements of your business. You’ll need to share any business plans or forecasts, even in draft form, prepared with respect to your company.
For an asset purchase, the requirement of the account is lessened and you’ll need to provide three years of financial records and any management accounts that include the business.
Financing history
In both asset and share purchases the solicitors will want to see full copies of all documents related to overdrafts, loans, credit etc – any form of debt or financing should be recorded and provided during due diligence.
This also includes mortgages and any property debt, which is vitally important in any kind of business transaction and especially when you’re buying a pharmacy as you’re buying the premises too.
The level of finance-related searches occurring during a share purchase is far greater than in an asset one. Debts, grants, loans and even credit arrangements between yourself and customers are included. Part of due diligence includes the full details of your pharmacy’s particulars – including everything from standard operating hours through to licenses, the addresses of account customers, details around prescription agreements, deliveries and collections and more. Essentially, you’ll be giving over as much information as possible to show that your pharmacy is a viable business.
Miss KazimI had the pleasure of working with Tabriz Rashid for legal matters related to our pharmacy, and I cannot recommend him highly enough. He is incredibly smart, professional, and thorough in his work. From the moment we started working together, he showed a deep understanding of both the legal complexities and the specific needs of the pharmacy industry.
What stands out most is his responsiveness and willingness to go the extra mile. He explains things in a way that’s easy to understand, always takes the time to answer questions, and provides practical solutions. I truly felt that he had our best interests at heart throughout the entire process. If you’re looking for a lawyer who is not only knowledgeable but also genuinely cares about his clients, Tabriz Rashid is the one to call. His expertise and support have been invaluable to us.
Miss KazimI had the pleasure of working with Tabriz Rashid for legal matters related to our pharmacy, and I cannot recommend him highly enough. He is incredibly smart, professional, and thorough in his work. From the moment we started working together, he showed a deep understanding of both the legal complexities and the specific needs of the pharmacy industry.
What stands out most is his responsiveness and willingness to go the extra mile. He explains things in a way that’s easy to understand, always takes the time to answer questions, and provides practical solutions. I truly felt that he had our best interests at heart throughout the entire process. If you’re looking for a lawyer who is not only knowledgeable but also genuinely cares about his clients, Tabriz Rashid is the one to call. His expertise and support have been invaluable to us.
Mr KadriI want to thank Tabriz his outstanding support and dedication throughout the pharmacy purchase . He has always been available, even outside regular hours, to answer my questions and address any concerns. His professionalism and commitment made a challenging process much easier for me. It was my first time purchase and so with his attention to detail, patience and knowledge he gave me confidence and peace of mind throughout.
Miss KazimI had the pleasure of working with Tabriz Rashid for legal matters related to our pharmacy, and I cannot recommend him highly enough. He is incredibly smart, professional, and thorough in his work. From the moment we started working together, he showed a deep understanding of both the legal complexities and the specific needs of the pharmacy industry.
What stands out most is his responsiveness and willingness to go the extra mile. He explains things in a way that’s easy to understand, always takes the time to answer questions, and provides practical solutions. I truly felt that he had our best interests at heart throughout the entire process. If you’re looking for a lawyer who is not only knowledgeable but also genuinely cares about his clients, Tabriz Rashid is the one to call. His expertise and support have been invaluable to us.
Miss KazimI had the pleasure of working with Tabriz Rashid for legal matters related to our pharmacy, and I cannot recommend him highly enough. He is incredibly smart, professional, and thorough in his work. From the moment we started working together, he showed a deep understanding of both the legal complexities and the specific needs of the pharmacy industry.
What stands out most is his responsiveness and willingness to go the extra mile. He explains things in a way that’s easy to understand, always takes the time to answer questions, and provides practical solutions. I truly felt that he had our best interests at heart throughout the entire process. If you’re looking for a lawyer who is not only knowledgeable but also genuinely cares about his clients, Tabriz Rashid is the one to call. His expertise and support have been invaluable to us.
Mr KadriI want to thank Tabriz his outstanding support and dedication throughout the pharmacy purchase . He has always been available, even outside regular hours, to answer my questions and address any concerns. His professionalism and commitment made a challenging process much easier for me. It was my first time purchase and so with his attention to detail, patience and knowledge he gave me confidence and peace of mind throughout.
