Business Acquisition Term Sheet Generator for the USA

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Key Requirements PROMPT example:

Business Acquisition Term Sheet

"Need a Business Acquisition Term Sheet for our technology company's planned acquisition of a software development firm with 50 employees, including specific provisions for IP transfer and employee retention, targeting a closing date in March 2025."

Document background

The Business Acquisition Term Sheet is a crucial preliminary document used in mergers and acquisitions transactions across the United States. It serves as a roadmap for the transaction, documenting the parties' initial understanding of key business and legal terms. While primarily non-binding, it forms the basis for negotiating definitive agreements and typically includes essential elements such as purchase price, structure, timing, and key conditions. This document is particularly important in complex transactions where parties need to align on major points before investing in detailed due diligence and documentation.

Suggested Sections

1. Parties: Identification of buyer and seller entities, including full legal names and jurisdiction of incorporation

2. Background: Context of the proposed transaction and brief description of the business being acquired

3. Definitions: Key terms used throughout the term sheet

4. Transaction Structure: Detailed outline of whether transaction is asset or stock purchase, and basic structure of the deal

5. Purchase Price: Detailed breakdown of consideration, including cash, stock, assumed debt, and payment terms

6. Closing Conditions: Prerequisites that must be met before the transaction can be completed

7. Due Diligence: Scope, process, and timeline for buyer's investigation of the target business

8. Timing: Expected timeline for due diligence, definitive agreements, and closing

9. Non-Binding Nature: Statement clarifying which provisions are binding and non-binding

Optional Sections

1. Employee Matters: Terms regarding retention, compensation, and benefits of existing employees post-closing. Include when workforce transition is material to the deal

2. Earnout Provisions: Structure of contingent payments based on future performance metrics. Include when part of purchase price is performance-based

3. Exclusivity: Terms preventing seller from negotiating with other parties. Include when buyer requires deal protection

4. Transition Services: Framework for post-closing support arrangements. Include when seller will provide temporary operational support

5. Regulatory Approvals: Required governmental or regulatory clearances. Include when transaction requires specific regulatory review

Suggested Schedules

1. Schedule A - Purchase Price Calculation: Detailed methodology for calculating final purchase price, including adjustments

2. Schedule B - Key Assets: Preliminary list of material assets included in the transaction

3. Schedule C - Excluded Assets: List of assets specifically excluded from the transaction

4. Schedule D - Key Employees: List of essential employees and proposed retention terms

5. Schedule E - Required Consents: List of material third-party and governmental approvals required

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Technology
Manufacturing
Healthcare
Retail
Professional Services

Relevant Teams

Legal
Finance
Corporate Development
Operations
Executive Leadership

Relevant Roles

Chief Executive Officer
Chief Financial Officer
General Counsel
Corporate Development Director
Investment Banking Director
M&A Director
Business Development Manager

Industries

Hart-Scott-Rodino Antitrust Improvements Act: Federal law requiring companies to file pre-merger notifications for certain acquisitions, allowing government review of potential antitrust implications

Securities Exchange Act of 1934: Federal law governing securities trading and public company requirements, relevant when publicly traded companies are involved in the acquisition

Securities Act of 1933: Federal law regulating securities offerings and registration requirements for securities-based transactions

Internal Revenue Code: Federal tax laws affecting the structure, timing, and tax implications of the business acquisition

Federal Trade Commission Act: Federal law prohibiting unfair competition and deceptive practices in business transactions

Sherman Antitrust Act: Primary federal antitrust law prohibiting monopolistic business practices and anticompetitive behavior

Clayton Act: Federal law supplementing antitrust regulations, specifically addressing mergers and acquisitions that may reduce competition

State Corporate Laws: State-specific regulations governing corporate formation, operation, and transactions within each jurisdiction

Blue Sky Laws: State-specific securities laws regulating the offering and sale of securities to protect investors from fraudulent activities

State Antitrust Laws: State-specific regulations preventing anticompetitive business practices within state jurisdictions

State Bulk Sales Laws: State regulations protecting creditors in transactions involving the transfer of significant business assets

WARN Act: Federal law requiring advance notification of significant layoffs or plant closings in business transitions

ERISA: Federal law governing employee benefit plans and their treatment during business acquisitions

Federal Trademark Laws: Laws protecting trademarks and service marks in business transactions, including the Lanham Act

Patent Laws: Federal laws governing the transfer and ownership of patent rights in business acquisitions

Trade Secret Protection Laws: Federal and state laws protecting confidential business information during acquisition processes

Environmental Protection Agency Regulations: Federal environmental regulations affecting business operations and liability transfer in acquisitions

State Environmental Laws: State-specific environmental regulations affecting property transfers and operational compliance

Find the exact document you need

Term Sheet Merger And Acquisition

A non-binding document outlining key terms and conditions for proposed M&A transactions under U.S. law.

How Genie AI reduced drafting time by 75% for a legal firm

Let's create your Business Acquisition Term Sheet

Authors

Alex Denne

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