Yes, in a share sale it’s likely that all the assets and liabilities will automatically transfer to the buyer. The buyer now becomes the owner of the target, and rights/contracts/the business will generally stay in place without disruption. So if you’re concerned about saving the IP, a share sale might be a better bet.
Imagine you’re the CEO of a media company. You agree with the shareholders – and the rest of the board – to put the company up for an auction sale – that’s where a number of companies can bid to acquire your company.
You hire a team of advisors – investment banks, lawyers and accountants – to prepare the data room.
Much of the acquisition process now depends on:
- Why are you selling?
- Are you looking for a quick sale?
- How much are you aiming to sell the company for?
- How many skeletons do you have in your closet?
- Are you selling because your business isn’t doing well, or you just want to retire?
- And many more…
Now if we don’t have the answers to those questions, we can still apply the considerations you listed to the media company. It does depend on what type of media company they are, but we can put forth some general considerations:
- Finance: how does your company make money? Through subscriptions? Do you have evidence of a large audience? What are your projected financials? Are you diversified? What markets do you operate in?
- IP. Try to be specific, what does that mean exactly? The value of its brand? Is it a reputable media company? Can you identify your intangible assets? Do you have trademarks, are they registered
- Employees: Media companies are likely to have many employees, what kind of contracts do they have?
- Technology: how do you optimise technology to cut costs? How are you dealing with competition from online services? How about apps? Or audio/video?
- Contracts: What about contracts? Do you have deals with advertisers? Where do you get your data from?
The point is, try to think about what the purpose of a sale might be, and if you want to distinguish a particular type of company – what makes them different?
Finally, you’re right, intellectual property is central to the value of a media company. Counsel for the bidders will have to check whether its assets are protected, often by a search at the Intellectual Property Office or Trade Mark Registry – depending on the type of asset.