Selling a haulage company: completion accounts, set-off and a non-compete, and a sale that did not complete
A tipper and grab hire business with an operator's licence, a mid six-figure share sale with completion accounts and deferred consideration, and a deal that did not reach completion
By Malcolm ZoppiServices
Key facts
- Deal type
- Share sale
- Acting for
- Seller (the owner)
- Business
- Tipper lorry and grab hire haulage company
- Sector
- Services
- Deal value
- Mid six figures
- Structure
- Share sale with a fixed completion payment, deferred consideration and a net asset adjustment through completion accounts
- Timescale
- Negotiated over summer 2024
- Completed
- Did not complete
- Lead solicitor
- Malcolm Zoppi
At a glance
We acted for the owner of a tipper lorry and grab hire company on a proposed share sale for a mid six-figure sum: a fixed payment on completion, deferred consideration, and an adjustment for net assets through completion accounts. We negotiated the definitions that drive the price, protections around set-off and a non-compete that left the seller free to take non-competing work. The sale did not complete.
The client and the objective
The seller wanted to sell the company and step back, with a paid consultancy period afterwards, and to make sure the price could not be eroded after completion by disputes over the accounts.
The deal as proposed
- Share sale of the entire issued share capital.
- A fixed payment on completion, deferred consideration, and a pound-for-pound adjustment for net assets.
- A consultancy period for the seller.
Key legal issues and how we dealt with them
Defining net assets
When the price moves with the net assets, the definition decides who gets what. Working with the seller's accountant, we settled a definition that matched how the business actually trades, so that the debtor book and creditors were counted fairly.
Set-off instead of cash claims
The buyer's claims were to be set off against the deferred consideration rather than pursued as cash claims against the seller, which limited the seller's exposure to money not yet received.
A non-compete that let the seller keep working
The buyer wanted a five-year non-compete. We added a consent mechanism and a right of first refusal, so that the seller could still take work that did not compete with the business.
The operator's licence and the company's borrowing
A haulage company depends on its operator's licence, so the Traffic Commissioner had to be notified of the change of control, and an earlier regulatory investigation, which had concluded favourably, was disclosed. The company's government-backed loan and the security attached to it had to be dealt with at completion.
Outcome
The sale did not reach completion. The work on the price mechanism, set-off and restrictions remains a template for a future sale.
What this deal shows
- With completion accounts, the definitions are the price; agree them with the accountants early.
- Set-off against deferred consideration is safer for a seller than open cash claims.
- In regulated sectors such as haulage, the licence position is central to the deal.
“Not every sale completes. The points we won on the price mechanism and set-off would have protected the seller had it gone ahead, and they are the right starting point for the next buyer.”