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Business Acquisition Term Sheet

Business Acquisition Term Sheet Template for Canada

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Key Requirements PROMPT example:

Business Acquisition Term Sheet

"I need a Business Acquisition Term Sheet for the purchase of a Canadian technology company valued at $50M, with specific focus on intellectual property protection and an earnout structure for the founding team who will remain post-acquisition."

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Document background
The Business Acquisition Term Sheet is a crucial preliminary document used in Canadian M&A transactions to memorialize the key commercial and legal terms agreed upon between parties during initial negotiations. It serves as a foundation for due diligence and the preparation of definitive agreements, incorporating considerations from Canadian federal and provincial legislation. While primarily non-binding, it demonstrates serious intent and typically includes binding provisions regarding confidentiality, exclusivity, and expense allocation. The document is particularly valuable in complex transactions where clarity on fundamental terms is essential before proceeding with detailed due diligence and final documentation. It helps align parties' expectations early in the process and provides a structured framework for progressing the transaction efficiently.
Suggested Sections

1. Parties: Identification of the buyer, seller, and target company with full legal names and jurisdictions

2. Background: Brief context of the proposed transaction and purpose of the term sheet

3. Definitions: Key terms used throughout the term sheet

4. Transaction Structure: Type of transaction (asset/share purchase, merger) and basic mechanics

5. Purchase Price: Proposed consideration, including amount, form of payment, and any adjustments

6. Payment Terms: Timing and method of payment, including any deferred consideration or earnout provisions

7. Key Assets/Business: Description of the business/assets being acquired

8. Due Diligence: Scope, process, and timeline for due diligence investigation

9. Conditions Precedent: Key conditions that must be satisfied before closing

10. Timeline: Expected dates for key milestones including signing, due diligence, and closing

11. Exclusivity: Terms of exclusive negotiation period

12. Confidentiality: Confidentiality obligations of the parties

13. Binding Effect: Clear statement of which provisions are binding and non-binding

14. Costs: Responsibility for transaction costs and expenses

15. Governing Law: Applicable law and jurisdiction

Optional Sections

1. Employee Matters: Terms relating to employee retention, benefits, and transition - include when workforce is a key component of the acquisition

2. Regulatory Approvals: Specific regulatory requirements and approval processes - include when transaction requires regulatory clearance

3. Intellectual Property: Special provisions for IP transfer or licensing - include when IP is a significant asset

4. Real Estate: Property-related terms - include when real estate is a material component

5. Environmental Matters: Environmental compliance and liability provisions - include for industries with environmental exposure

6. Financing Contingency: Terms related to buyer's financing requirements - include when purchase is subject to financing

7. Non-Competition: Non-compete and non-solicitation terms - include when protecting business value post-acquisition

8. Tax Structure: Preliminary tax considerations - include when tax structure is critical to deal value

9. Break-up Fee: Terms of termination fee - include in larger transactions or competitive situations

Suggested Schedules

1. Purchase Price Calculation: Detailed breakdown of purchase price components and adjustments

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

3. Excluded Assets/Liabilities: Preliminary list of assets and liabilities excluded from the transaction

4. Key Contracts: List of material contracts requiring review or assignment

5. Required Consents: Preliminary list of third-party consents needed

6. Key Employees: List of key employees and proposed retention terms

7. Timeline Schedule: Detailed transaction timeline with key dates and deadlines

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 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

Financial Services

Healthcare

Real Estate

Retail

Energy

Mining

Telecommunications

Professional Services

Transportation & Logistics

Consumer Goods

Agriculture

Media & Entertainment

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Executive Leadership

Strategy

Tax

Accounting

Business Development

Risk Management

Compliance

Corporate Secretariat

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Corporate Development Director

Mergers & Acquisitions Director

General Counsel

Corporate Attorney

Investment Banker

Financial Controller

Business Development Manager

Strategy Director

Board Member

Managing Director

Transaction Advisory Partner

Due Diligence Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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