Coates & Davenport, P.C.

Buyouts could be profitable opportunities for Virginia businesses

Business owners in Virginia may spend many years cultivating their enterprise. However, sometimes an opportunity to transfer ownership of the business presents itself. This is known as a "buyout." A buyout is a transaction under business law in which ownership of a business is transferred to one or more individuals or another business. An offer for a buyout may be something a business owner wishing to sell his or her business seeks, or it could come as a surprise from an interested buyer. There are a variety of types of buyouts that Virginia business owners could be presented with or seek out.

One common type of buyout that many in Louisiana may already be aware of is an acquisition. Through an acquisition, the acquiring business will purchase a smaller business. The smaller business would then either be a division of the acquiring business or it could continue to operate independently.

Another type of buyout is an employee buyout. In this scenario, the business's workers buy the company they are employed with from the company's owners. The goal of an employee buyout could be to keep a business from shutting down or to appease workers who believe in the company but are not satisfied with the current ownership of the company.

A third type of buyout is an initial public offering. In an IPO the business owner will sell stock in his or her business to the general public, including those wishing to invest in the business and other business entities. Sometimes the business owner will retain some of the stock in his or her business, but other times an IPO will operate as a complete buyout.

These are only some types of buyouts Louisiana businesses may consider or be presented with; there are others. A successful buyout depends on many factors and can be a complicated area of business law. This post only provides general information on the topic of buyouts, so those interested in such business transactions will want to seek professional guidance, to determine what course of action is best given their specific situation.

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Richmond, VA 23230

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