Acquisition of Towngate Tyres and Service Centre Limited and Associated Commercial Property

25 March 2026

We were instructed to act on behalf of the buyers in connection with the acquisition of Towngate Tyres and Service Centre Limited, a well‑established automotive servicing business. The transaction involved multiple workstreams including:

• formation of new companies within a buyer group;
• full due diligence on the business being acquired;
• internal matters for the buyer including the preparation of personal and intercompany loans, together with a shareholders agreement and cross option agreement between the buyers; and
• both the purchase of the entire issued share capital of the trading company and the simultaneous acquisition of the commercial premises from which the business operated.

This matter required coordinated corporate and property support, as well as the creation of a bespoke acquisition structure tailored to a management buy-out arrangement. The transaction was completed via our affiliation with 360 Law Services in November 2025.

Given the dual objectives of business continuity and long‑term asset protection, it was important to design a structure that balanced operational control for the management team with appropriate protections for family investors.

Working in conjunction with the buyers’ accountants who provided tax advice and support on financial due diligence, it was agreed that the transaction would be best structured through:

• a newly incorporated holding company to acquire the shares in the trading business, and
• a separate subsidiary property company to acquire the commercial premises.

By having a separate subsidiary property company, this also allowed a rental arrangement to be put in place between the trading company (as tenant) and the property subsidiary (as landlord) to provide additional income into the group to facilitate repayment of the funding provided by the shareholders in the holding company.

This structure allowed the trading and property assets to be held separately, providing commercial flexibility and mitigating risk, while accommodating the funding arrangements put in place by the shareholders. and required careful legal implementation to ensure the entities operated cohesively within a formal group structure.

Our Role

We advised the buyers throughout the transaction, managing all legal aspects of the acquisition from the preliminary stages of setting up the buyer group of companies and drafting heads of terms through to successful completion of the deal for the buyers as our client. Our work included:

1. Formation of Acquisition and Property Companies

We advised on and completed the formation of both the holding company and the subsidiary property company. Our work included:

• Incorporating the companies in line with the agreed acquisition structure, including putting in place the correct form of articles of association for each company as a holding or subsidiary entity.
• Drafting all initial board minutes and resolutions for both entities to approve the formation of each and addressing all initial regulatory matters such as the appointment of first directors and adoption of the statutory registers.
• Preparing the statutory registers, ensuring each company was fully compliant from inception, and producing the first share certificates.
• Advising the buyers on appropriate forms of director and shareholder agreements to ensure effective governance and proper protection for those involved.

This process ensured the buyer group was properly structured with the correct documentation in place from the outset.

2. Funding Arrangements and Loan Documentation

The funds required for both the share acquisition and the property purchase were provided by way of shareholder loans to the holding company and a subsequent loan from that company to the subsidiary company. We advised on and drafted:

• Personal loan agreements between the individual shareholders and the holding company to fund the share purchase 
• An intercompany loan agreement between the holding company and the subsidiary property company to finance the property acquisition.

These documents clearly set out repayment terms, interest provisions, and priority arrangements, ensuring transparency and legal certainty across the group structure.

3. Due Diligence and Buyer Protection

As part of our preliminary work for buyers, our role includes ensuring that the buyer has all relevant information about the business they intend to acquired before signing on the dotted line. To facilitate this, we prepared a detailed set of legal due diligence enquiries on behalf of the buyers to be answered by the sellers, covering all aspects of the business from the company’s structure and finances, contracts and arrangements with customers and suppliers, through to details of assets held and employees engaged. 

The due diligence process is often tedious for both buyers and sellers. We managed the due diligence process from start to finish to eliminate as much of the pressure for our client as possible: reviewing the seller’s due diligence replies and supporting documentation, identifying key commercial, contractual, and operational risks and preparing a comprehensive due diligence report for the buyers, highlighting issues requiring further negotiation or protection within the transaction documents early on.

This process enabled the buyers to make informed decisions and provided a strong foundation for the drafting of the transaction documents.

4. Drafting and Negotiating the Share Purchase Agreement

We drafted the Share Purchase Agreement (SPA) to reflect the agreed commercial terms and protect the buyers’ position. We provided detailed advice on all aspects of the SPA, including:

• Negotiating the commercial terms to align with the buyer’s objectives and the heads of terms which were agreed between the parties at the outset.
• Advising on warranty and indemnity protection, limitation periods, and liability caps – to ensure that these were not unduly onerous on the buyers in the event of a breach of warranty claim needing to be made.
• Reviewing the seller’s disclosure letter and disclosure bundle in order to advise the buyers on the impact of disclosures made against the warranties and ensuring appropriate remedies and protections were built into the agreement.

5. Preparation of Ancillary Transaction Documents

Although it is common practice for the seller’s solicitors to prepare the ancillary transaction documents, on this occasion we also prepared all ancillary documentation for the transaction itself at the request of the seller’s solicitor. 

We prepared all ancillary transaction documents, ensuring they aligned with the SPA, were in line with regulatory requirements and supported a smooth transfer of ownership between the parties. This included preparing board minutes, shareholder resolutions and stock transfer forms, PSC notifications and resignation letters for outgoing directors amongst other items.

Preparing these documents in‑house allowed us to maintain full control over the transaction timetable and ensure consistency across all documentation.

6. Completion of the Transaction

We managed the completion process, coordinating execution of all transaction documents electronically for ease and speed and managing the flow of completion funds and loan drawdowns to ensure an efficient closing. Following completion of the transaction, we assisted with the necessary post‑completion matters on behalf of the buyers including arranging the stamping of the stock transfer forms, making statutory filings and updating company records at Companies House.

The transaction completed successfully, with the buyers acquiring both the trading business and the associated commercial premises through a well‑structured corporate group. The acquisition structure provided long‑term flexibility, asset protection, and clarity around funding arrangements.

Our integrated corporate and property support ensured a smooth, coordinated transaction and delivered a robust legal framework to support the buyers’ future growth. In addition, as this was the first transaction our clients had been involved with, it was key that our legal support was delivered in a pragmatic manner in language the buyers understood to help them make key decisions throughout the process to achieve their commercial objectives.