What happens to my electrical contracts when I sell?

You have dedicated years to building a thriving Electrical and Mechanical business, nurturing client relationships and securing valuable contracts that form the backbone of your operation. As you contemplate selling, a natural and critical question arises: what happens to these crucial electrical contracts when I sell?

For many E&M firms, particularly those specialising in commercial or industrial services, long-term service agreements, planned preventative maintenance (PPM) contracts, and ongoing project work are not merely revenue streams, they are the foundation of the value a buyer is paying for. What happens to them on a sale depends on how the sale is structured and on the terms of each contract, so it is worth reviewing your key agreements well before you go to market.

Share sale or asset sale

On a share sale, where the buyer buys the company itself, your contracts stay with the company, so your customers go on dealing with the same business. Read each contract for any clause that lets the customer end it if the company changes hands.

On an asset sale, where the buyer buys the business but not the company, each contract has to be moved across to the buyer, and that can need the customer's agreement.

What to check before you sell

Keep every contract in writing, with its renewal date, price and what it covers, and note any clause about transfer or a change of owner. A buyer's solicitor will read them, and a complete contract register makes that part of the sale quicker.

When you decide to sell, here is how Simon Read runs the sale, from the first conversation to completion.