In August Hewitsons (Northampton) Corporate Team successfully completed the acquisition of the entire issued share capital of a Suffolk-based manufacturing company on behalf of one of its US clients.The buyer had made a substantial investment in the target company earlier this year, and with full agreement and cooperation of the three majority shareholders, it was decided that he would take over control of the company by acquiring all the shares.The Articles of Association of the company allowed the purchaser of 70% or more of the shares in the company to compulsorily purchase the remaining shares on the same terms.  Whilst such “drag-along” rights are not an uncommon feature of the constitutions of private limited companies in the UK with multiple shareholders, it is in practice quiet rare for a buyer to have to rely on them.  The implementation of such rights by a third-party buyer is often viewed as a potentially hostile act by the minority shareholders.In this particular case the wording of the target company’s Articles (drafted by its own lawyers) was far from clear and the buyer had reason to believe that certain of the minority shareholders would seek to challenge the implementation of the “drag-along” through the courts.  It was therefore necessary to seek Counsel’s opinion on the proposed procedures before embarking on the transaction.Neil Harpham, Corporate Partner at Hewitsons, who led the acquisition on behalf of its client comments:“This is one of a number of transactions we have worked on this year for US clients making significant investments in UK companies.  The deal was particularly interesting and satisfying as it required a high degree of precision in terms of the process and the timings.  At any point up to completion, there was a possibility that the minority shareholders could de-rail the deal by serving a High Court injunction on the buyer.  Our client was delighted when the acquisition finally completed without opposition”.[caption id="attachment_2762" align="alignleft" width="150"] Neil Harpham[/caption]