Mergers and Acquisitions: Buying a Land-Based Business
By Attorney & Counselor, Stephen M. Ringquist
Buying a land-based business is very different from purchasing a purely service or digital company. In addition to traditional mergers and acquisitions considerations, land-based businesses may often involve real property, water rights, mineral interests, equipment, livestock, regulatory permits, and long-standing banking relationships. A thoughtful and well-structured process helps protect both the investment and the legacy of the land involved.
This general overview highlights key documents and processes buyers should consider when acquiring a land-based business, with a focus on business and banking considerations.
Understanding the Structure of the Deal
One of the first decisions in any acquisition is how the transaction will be structured. In land-based business acquisitions, this decision often carries added complexity.
Common structures include:
- Asset purchases where the buyer selects specific assets, such as land, equipment, contracts, and permits
- Entity purchases where the buyer acquires the ownership interests of the existing company
The structure impacts liability exposure, tax treatment, financing, and how land and related rights transfer. Buyers should work closely with legal and financial advisors early to determine which structure best aligns with their goals.
Core Business Documents to Review
A thorough review of business records is essential to understanding what is being purchased and what risks may be involved.
Key documents often include:
- Organizational documents such as formation records, governing agreements, and ownership schedules
- Existing contracts including customer agreements, vendor contracts, leases, and service agreements
- Employment and independent contractor agreements
- Insurance policies and claims history
- Intellectual property registrations, if applicable, such as trademarks or proprietary processes
For land-based businesses, it is especially important to confirm which contracts are transferable and whether third party consents are required.
Real Property and Land Related Documents
Land is often the most valuable asset in these transactions and requires careful review.
Documents to evaluate include:
- Deeds and title commitments
- Surveys and legal descriptions
- Easements, rights of way, and access agreements
- Zoning and land use restrictions
- Agricultural, conservation, or wildlife related agreements
Buyers should also confirm whether any portion of the land is subject to restrictions that could affect future operations or expansion.
Banking and Financing Considerations
Financing a land-based acquisition often involves both traditional business lending and real estate secured lending.
Important banking related items include:
- Existing loan documents, promissory notes, and security agreements
- Mortgages and Deeds of Trust
- UCC filings affecting equipment, inventory, or receivables
- Lender consent requirements triggered by a sale or change in control
Buyers should coordinate early with lenders to understand underwriting requirements, collateral expectations, and closing timelines. Delays often occur when lender approvals are addressed too late in the process.
Financial Records and Due Diligence
A clear picture of the business financials is critical.
Buyers should review:
- Historical financial statements and tax returns
- Accounts receivable and payable
- Inventory and equipment schedules
- Capital expenditures and maintenance records
- Cash flow projections
For land-based operations, buyers may also want to assess how weather, commodity pricing, or seasonal cycles impact revenue and expenses.
Regulatory and Operational Considerations
Many land-based businesses operate under industry-specific regulations.
Areas to examine include:
- Environmental compliance and permits
- Water rights and usage authorizations
- Agricultural or livestock-related regulations
- Local, state, or federal approvals tied to operations
Understanding these obligations helps buyers avoid unexpected compliance costs after closing.
The Closing Process and Post Closing Planning
A successful closing requires coordination among legal counsel, lenders, accountants, and title professionals.
Closing documents often include:
- Purchase agreements and disclosure schedules
- Assignment and assumption agreements
- Financing and security documents
- Deeds and title related instruments
After closing, buyers should prioritize integrating banking relationships, updating authorizations, and ensuring operational continuity.
Final Thoughts
Acquiring a land-based business is both a financial transaction and a stewardship decision. Careful attention to business documents, land-related records, and banking considerations can help protect the investment and position the business for long term success.
Working with educated advisors who understand both mergers and acquisitions and land-based operations is key to navigating this process with confidence.