Support for the strategic sale of an IT company to an international holding company

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Dubograev Dmitry

Lawyer

USA / Virginia

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Publication date: 16.06.2025

My name is Dmytro Dubograyev, I am the head and managing partner of a law firm

Introduction: This was one of the most complex and strategically important cases in the field of legal support for IT business. We represented an IT company with unique expertise, supporting its development for over 12 years — from the initial foundation stage to its successful sale for an eight-figure amount to an international strategic buyer. During this period, our team provided comprehensive legal support — from corporate architecture and contract work to full preparation for the M&A transaction.

Case Overview

Our client was an international IT company operating in the SaaS sector, with its own R&D, unique know-how, complex corporate structure, and a wide international client portfolio.

Since the company's foundation, we have:

1. Structured the corporate model taking into account future investment rounds and entry into international markets.
2. 
   Prepared shareholder agreements, management policies, and corporate governance documents.
3. 
   Ensured legal protection of intellectual property.
4. 
   Organized compliance systems enabling work with clients from the USA, EU, Asia, and the Middle East.

After 12 years of successful operations and business scaling, an attractive acquisition offer was received from an international holding. At the final stage, the focus shifted from legal support of daily operations to the strategic protection of founders' interests during the exit process.

Challenges

During the legal support process, we faced several complex tasks:

1. Structuring a transnational corporate architecture considering tax and legal specifics of multiple jurisdictions.
2. 
   Ensuring continuous protection of intellectual property when onboarding new investors and employees.
3. 
   Contract work with clients from different legal systems (USA, EU, Asia), considering local regulations, data protection, and sanctions compliance.
4. 
   Preparing corporate documentation for investor audits.
5. 
   Conducting internal legal due diligence to identify and eliminate potential legal risks prior to the transaction.
6. 
   Developing a deal structure incorporating an earn-out mechanism where part of the payments depended on meeting KPIs during the transition period.
   
    

Legal Strategy

The legal strategy consisted of several key blocks:

• Corporate Architecture:

1. Development of a multi-level corporate structure to optimize tax and investment flows.
2. 
   Preparation of charter documents, shareholder agreements, and stock option programs for key employees.
   
    

• IP & Compliance:

1. Preparation and execution of IP assignment agreements for all developers, consultants, and contractors.
2. 
   Trademark registration and protection of know-how in key jurisdictions.
3. 
   Creation of documentation systems for source code ownership and core developments.
4. 
   Implementation of cybersecurity policies, NDAs, non-compete and non-solicitation agreements, and data processing policies.

• Contract Base:

1. Audit and updating of all key contracts with clients and partners.
2. 
   Inclusion of provisions minimizing buyer risks and simplifying due diligence.
   
    

• Preparation for M&A Transaction:

1. Conducting vendor due diligence.
2. 
   Structuring deal terms, including:
3. 
   amount of fixed payment;
    
4. earn-out component with clearly defined KPIs;
    
5. escrow account for warranty obligations;
6. 
   limitations of founders' liability;
    
7. clear conditions for founders' participation during the transition period.
   
    

Deal Outcome

After extensive negotiations with investors and their legal advisors (including international law firms and Big4), a final agreement was reached:

1. The transaction was signed for an eight-figure amount in USD.
2. The founders received fair compensation for many years of work, with clearly defined and achievable earn-out terms.
3. All legal warranties were drafted with maximum clarity to minimize the risk of future disputes.
4. The company was successfully integrated into an international group, while the founders continued to participate in strategic management during the transition period.
   
    

Results

• Full legal support provided for the complex international transaction.
• Founders' interests protected at all stages.
• The company's reputation and stable operations were successfully preserved.
• Clear transfer of intellectual property rights without tax or legal risks.
• A balance between seller and buyer interests was achieved, allowing to avoid disputes both during and after the transaction.