CASE STUDY ON TRANSACTION ADVISORY AND SUPPORT FOR STRATEGIC SHARE ACQUISITION IN A LIGHTING DESIGN AND MANUFACTURING COMPANY

Acquisitions serve as a strategic mechanism for businesses seeking diversification, operational synergies, and entry into new verticals. SimplyBiz acted on behalf of the Acquirers as the legal and transaction advisor in a strategic acquisition involving the transfer of a 50% equity stake in a private company engaged in the design and manufacture of high-end interior and exterior lighting solutions. This case study outlines the structured approach and advisory support provided by SimplyBiz across all stages of the transaction.

Background of the Transaction and the Target Company

The transaction was driven by the Acquirers’ objective to enter the high-margin electrical lighting segment through acquisition of a significant stake in a business with robust manufacturing infrastructure and brand equity. The Target Company is a prominent manufacturer of customized lighting solutions under its own brand, specializing in premium interior and exterior applications. With in-house machinery for cutting, printing, and assembly, the business has developed full-stack manufacturing capabilities and a loyal customer base, making it well-positioned for scalable growth.

Client Requirement

The Acquirers, comprising a consortium of a partnership firm and individual investors seeking diversification into the lighting and interiors segment, proposed to acquire 50% of the equity share capital of the Target Company from one of its promoters (the Seller) at a valuation of INR 61 crores. The engagement required legal and strategic advisory to ensure a compliant, commercially sound, and risk-mitigated transaction.

SimplyBiz was engaged to provide comprehensive transaction advisory and legal support, with specific emphasis on:

• Legal, taxation, and corporate secretarial due diligence
• Structuring the transaction for tax and regulatory compliance
• Drafting, negotiation, and execution of the Term Sheet, Share Purchase Agreement, and Shareholders’ Agreement
• End-to-end support on transaction closure including handover management, and post-closing formalities

Our Approach and Work

We adopted a comprehensive, timeline-bound, and commercially aligned approach. Our key activities included:

1. Due Diligence
   1. Conducted detailed diligence across legal, corporate secretarial, financial and taxation verticals.
   2. Legal diligence included examination of contracts, regulatory approvals, employment matters, litigation, property records, insurance, and contingent liabilities.
   3. Corporate secretarial diligence focused on MCA filings, statutory registers, resolutions, and governance practices.
   4. Financial diligence included review of financial statements, review of revenue recognition methods, understanding revenue, including physical verification of assets.
   5. Tax diligence included review of filed returns, pending assessments, and outstanding statutory dues.

2. Structuring and Advisory
   1. Proposed a tax-efficient and regulatory-compliant structure aligned with the commercial objectives.
   2. Advised on post-acquisition shareholding pattern, governance rights, and board composition.
   3. Drafted and negotiated conditions precedent and subsequent to safeguard the transaction.
   4. Integrated detailed representations, warranties, indemnities, and retention mechanisms.

3. Drafting and Negotiation of Transaction Documents
   1. Term Sheet: Articulated key commercial and structural elements of the transaction.
   2. Share Purchase Agreement (SPA): Governed the definitive terms for transfer of shares, with detailed provisions on consideration mechanics, representations and warranties, indemnity framework, closing deliverables, and post-closing obligations.
   3. Shareholders’ Agreement (SHA): Codified governance terms, reserved matters, board rights, and exit options to ensure strategic alignment.

4. Closure Support
   1. Coordinated execution of closing deliverables, including:
      1. Share transfer instruments and board resolutions
      2. Release of Seller’s personal guarantees
      3. Appointment and resignation of directors
      4. Post-closing filings with the Registrar of Companies
      5. Comprehensive handover management including:
         1. Preparation of a structured handover plan covering statutory, operational, and financial aspects
         2. Coordination for handing over bank accounts, statutory registrations, licenses, books and records
         3. Transfer of control over internal systems, vendor relationships, and access credentials

Outcome

The transaction was successfully concluded within the agreed timelines, and the Acquirers acquired the desired equity stake with well-structured rights and protections. SimplyBiz’s strategic and legal involvement ensured legal clarity, regulatory compliance, and business continuity throughout the process. The Acquirers were equipped to focus on post-acquisition integration with complete operational and governance control.

This transaction exemplifies SimplyBiz’s ability to manage complex M&A transactions involving legal, regulatory, commercial, and operational dimensions. Through our integrated support on due diligence, transaction structuring, and documentation, we enabled a seamless, compliant, and value-aligned acquisition for the Acquirers. Our proactive handholding and collaborative approach reinforced SimplyBiz’s position as a trusted transaction advisor for growth-focused businesses.

Published by Shilpa Aggarwal (shilpa@simplybiz.in)

Date : 20 June 2025