Joint ventures & partnerships
“We were asked to act for a business that provided specialist consultancy services in the construction sector. It was considering the entering into of a joint venture with an overseas consultancy in a similar business area, with a view to making joint bids for contracts using their respective contacts. It was important to protect the two firms’ confidential client lists, at least whilst they got used to working together, and to share profits and costs fairly between them. The parties also wanted to provide for a possible future merger of their businesses, should the relationship develop as they hoped.
We established a new joint venture company (“JV Co”) and prepared a joint venture agreement to govern its management. The agreement and the constitution of JVCo shared income and expenses between the parties, in proportion to their respective contributions to each project. In conjunction with our Intellectual Property team, we prepared licences to protect the confidentiality in the client lists. The agreement also contained option arrangements, designed to bring about the merger at a fair price, if a decision was taken to proceed with the merger.
Two years later JVCo is going from strength to strength. The businesses haven’t merged, but there’s no reason to think that it won’t happen in the future.”
