Acquisition of large agricultural farms in Central and Eastern Europe

Investment Checklist:


Are you having a dream of buying a farm abroad?

Agriculture is an investment for life.
Start your considerations by reviewing our Investment Checklist.
It only takes a few minutes - but they can be used well and give rise to reflection.

A trade only requires that a Seller and a Buyer agree . . . .
But getting a change of ownership to succeed is not always so straightforward - and especially not abroad.

We have brokered many investments, helped organize many transactions, seen many ways to act and participated in many considerations. Of course, it is absolutely important, first and foremost, to control visions, the profession and the economy, but there are also other values to care for. It's no fun to have the perfect project when the pleasure and happiness doesn't come with it.

We have prepared an investment checklist, which of course cannot answer all specific questions, but we think it's a good place to start ones considerations, on the "long journey" it is to invest in agriculture abroad.

Disclaimer  

Investment Checklist

If it's the first time you invest abroad, then there are many things to prepare for.
Many questions to answer, both to yourself, your family and to those who will finance you.

The checklist is based on experience we have made in Central & Eastern Europe, in connection with our development and sale of investment projects since 1998 and the mediation of agriculture since 2004. It has been prepared as a combination of questions, answers and comments. The list is intended to initiate your initial considerations. It is no magic key, because such one does unfortunately not exist.

Disclaimer  

Preliminary considerations:


01. Can I buy farms abroad?

Can I acquire agricultural land in Poland and the Baltic countries?

Yes, you can acquire agricultural land in Poland and the Baltic countries. A trade requires, in principle, only that a buyer and a seller agree, but getting a change of ownership to succeed is not always so straightforward.

All EU citizens have, in principle, the right to purchase agricultural land in all EU countries, but for all countries, there are either specific rules with the EU or different local protectionist laws and regulations that may delay, curb or prevent foreigners acquisition. This obviously complicates the process.

It is often necessary to organize an ownership structure in the form of operating and holding companies. The specific solution is dependent on the circumstances at both Buyer and Seller.

How to get the right business identified?

Jesper Kjaer ApS has identified and mediated agricultural land, companies and projects in Central and Eastern Europe since 2004.                                                      .

Do I need advisors?

Yes !
These are the few that can carry out acquisition of large agriculture on its own - and especially abroad.

Use and listen to the counselors. Be sure to be well prepared and be involved in all processes. In the end; trust yourself only, "because it is only you who have the hand on the hotplate".

Begin selecting advisors early. It takes time to find the right ones that have the necessary skills and that you can count on.

You need both help and support from family and friends as well as professional advice. Purchasing farms abroad is an investment for life and even a small mistake can have major consequences.

If you are in doubt - then you have it definitely!
You need both help and support from family and friends as well as professional advice.
Purchasing farms abroad is an investment for life and even a small mistake can have major consequences.
These are the few that can carry out acquisition of large agriculture on its own - and especially abroad.

Use and listen to the counselors. Be sure to be well prepared and be involved in all processes. In the end; trust yourself only, "because it is only you who have the hand on the hotplate".
Begin selecting advisors early. It takes time to find the right ones that have the necessary skills and that you can count on.

No ! (?) ...

Yes, probably !

You need both help and support from family and friends as well as professional advice.
Purchasing farms abroad is an investment for life and even a small mistake can have major consequences.
These are the few that can carry out acquisition of large agriculture on its own - and especially abroad.

Use and listen to the counselors. Be sure to be well prepared and be involved in all processes. In the end; trust yourself only, "because it is only you who have the hand on the hotplate".
Begin selecting advisors early. It takes time to find the right ones that have the necessary skills and that you can count on.

What advisers should I choose and when?

Of course there is no unique list.
We propose and argue here for some:

  • Mediator and coordinator.
    You need one to identify purchase objects, create contacts, organize review, inspection and meetings, and a productive negotiation environment.

  • Agricultural consultants
    Obviously, it is important to be a professional yourself and rely on own skills, but talk to family, friends and colleagues about the potential.
    It is good to have a professional assessment and analysis of a specialist who may see the potential without involving too many emotions.
    It may also be a good idea to talk to a local professional, as it is not certain that the varieties and breeds you know from home are suitable for these specific conditions. There is often a reason why the varieties and breeds used are used here.
    Finally, collect all the information and analyze them yourself, because only you can make a decision.

  • Accountant & auditor
    There is a need to get solid budgets. Make sure to choose ood auditors at home and in the country you want to invest in.
    Start early to gather information for a budget and remember to write down where you have the information from. The bank will appreciate (request) the documentation, from where you have the information.
    Start by making your own budgets based on the information you know and revise them whenever there is new information.
    Search information at both your own and a local accountant & auditor, who knows the local laws and regulations.
    Get your accountant & auditor to help with the final budgets.
    Do not be too frugal in drafting budgets. They are the foundation for many years of work.

  • Lawyer
    There is a need to get solid agreements done. Make sure to choose good lawyers both at home and in the country you want to invest in.
    Do not be too frugal in drafting contracts. They are the foundation for many years of work.
    Start collecting information early, write down your thoughts and talk with Seller if he agrees.
    Ask your lawyer what opportunities he can see and review your plans.
    Get the lawyer in the country you want to invest in to draft the first draft contracts, once you have come so far, and have your own lawyer review them.

Find more information in the next sections.


02. Do you have support from your family and acquaintances?

It is important that your family and acquaintances support and back you up.

If you have a partner and/or children, then it is extra important that they understand and accept what it implies. It can be really hard for a partner to move to another country or that one's partner is traveling much of the time.

Our advice is; Make plans - talk to your loved ones about them - and listen to the answers. Many times.

If your family does not appriciate of the ideas; then it might be a good idea to reconsider the concept again.

Ask yourself and your loved ones some of these questions:

  • Does I, my partner and my children want to live or stay a lot abroad?
  • Should my children go to a foreign school?
  • Can we all miss the family we may leave?
  • Can we do without our friends and hobbies?
  • Can we do without the home we leave?

  • Do we all want the adventure?

Speak openly and honestly with your family and acquaintances about your plans.
If your family does not appriciate of the ideas; then it might be a good idea to reconsider the concept again.

If you have a partner and/or children, then it is extra important that they understand and accept what it implies. It can be really hard for a partner to move to another country or that one's partner is traveling much of the time.

Our advice is; Make plans - talk to your loved ones about them - and listen to the answers. Many times.

Ask yourself and your loved ones some of these questions:

  • Does I, my partner and my children want to live or stay a lot abroad?
  • Should my children go to a foreign school?
  • Can we all miss the family we may leave?
  • Can we do without our friends and hobbies?
  • Can we do without the home we leave?

  • Do we all want the adventure?

No ! (?)

Speak openly and honestly with your family and acquaintances about your plans.
If your family does not appriciate of the ideas; then it might be a good idea to reconsider the concept again.

If you have a partner and/or children, then it is extra important that they understand and accept what it implies. It can be really hard for a partner to move to another country or that one's partner is traveling much of the time.

Our advice is; Make plans - talk to your loved ones about them - and listen to the answers. Many times.

Ask yourself and your loved ones some of these questions:

  • Does I, my partner and my children want to live or stay a lot abroad?
  • Should my children go to a foreign school?
  • Can we all miss the family we may leave?
  • Can we do without our friends and hobbies?
  • Can we do without the home we leave?

  • Do we all want the adventure?


03. Do you already have experience from abroad?

Yes !

Do you already have investments abroad? Have you worked abroad? Or something completely different??
It is very important that you already have experience from abroad, almost regardless of what it is.

To do agriculture abroad makes completely different demands for you than at home.
Not necessarily harder - but it's different.

You must learn to live with:

  • Language
  • Culture
  • Traditions
  • Humour
  • Distances
  • Infrastructure
  • Ways to buy and sell
  • Ways to negotiate
  • .... and much more
It is you who will be a guest in another country . . . .

A little ...

Do you already have investments abroad? Have you worked abroad? Or something completely different??

You must be aware of that to do agriculture abroad makes completely different demands for you than at home.
Not necessarily harder - but it's different.
It would be good to discuss the matter with a colleague who has more experience.

You must learn to live with:

  • Language
  • Culture
  • Traditions
  • Humour
  • Distances
  • Infrastructure
  • Ways to buy and sell
  • Ways to negotiate
  • .... and much more
It is you who will be a guest in another country . . . .

No ... !
You should think a lot about what it means to you. There are many things to get involved in and you need to be aware that farming abroad makes quite different demands than at home.
It would be good to discuss the matter with a colleague who has experience.

You must learn to live with:

  • Language
  • Culture
  • Traditions
  • Humour
  • Distances
  • Infrastructure
  • Ways to buy and sell
  • Ways to negotiate
  • .... and much more

It is you who will be a guest in another country . . . .


04. Have you made up your own equity and your funding opportunities, for yourself?

Be realistic about what equity you can bring into a project.
One cannot buy farms abroad without a relatively large equity.
If you do not have sufficient capital on your own, then you might better to seek for one or more partners you can invest together with, or seek investors who can supplement with equity.

Locally there is a large difference between the amounts of own capital required, but one should not expect to invest abroad with less equity than 20-30% of the total capital invested.

Start early talking with to those who shall fund you. Tell them about your ideas and show preliminary budgets. Only in this way can you get a realistic idea of whether your project can be realized.

It is very important that you are quite honest with yourself as we have seen more investors become very disappointed when the project they have worked hard for a long time to realize finally proves unable to be funded sufficiently.

Don't know ... ?
It is important to have your equity and financing capabilities clarified and to be realistic about what you can bring into a project.
One cannot buy farms abroad without a relatively large equity.
If you do not have a relatively high own capital, on your own, then it may be a better idea to seek one or more partners with whom you can invest, or to seek investors that can supplement you with equity.

Locally there is a large difference between the amounts of own capital required, but one should not expect to invest abroad with less equity than 20-30% of the total capital invested.

Start early talking with to those who shall fund you. Tell them about your ideas and show preliminary budgets. Only in this way can you get a realistic idea of whether your project can be realized.

It is very important that you are quite honest with yourself as we have seen more investors become very disappointed when the project they have worked hard for a long time to realize finally proves unable to be funded sufficiently.

You should, as an absolute minimum, determine how much equity you can bring into a project and get an idea of your funding opportunities before proceeding with acquisition plans !

One cannot buy farms abroad without a relatively large equity.

If you do not have a relatively high own capital, on your own, then it may be a better idea to seek one or more partners with whom you can invest, or to seek investors that can supplement you with equity.

Locally there is a large difference between the amounts of own capital required, but one should not expect to invest abroad with less equity than 20-30% of the total capital invested.

Start early talking with to those who shall fund you. Tell them about your ideas and show preliminary budgets. Only in this way can you get a realistic idea of whether your project can be realized.

It is very important that you are quite honest with yourself as we have seen more investors become very disappointed when the project they have worked hard for a long time to realize finally proves unable to be funded sufficiently.


05. Have your current lawyer and accountant experience with international transactions?

That's good !
You need advice and sparring with your lawyer and accountant.

Depending on how you choose to organize your transaction, it may be important that your lawyer and accountant have experience with international transactions.

Ask them how they can help you and be critical about the answers.

Depending on how you choose to organize your transaction, it may be important that your lawyer and accountant have experience with international transactions.

Ask them how they can help you and be critical about the answers.

You might need to find an alternative.

No ... !
You need advice and sparring with your lawyer and accountant.

Depending on how you choose to organize your transaction, it may be important that your lawyer and accountant have experience with international transactions.

Ask them how they can help you and be critical about the answers.

You might need to find an alternative.


06. Does your current bank and banking advisor have experience in financing international transactions?

That's good.

Ask your bank advisor about how the business process is associated with financing international transactions.

It is important that you have a bank and an adviser with the required experience and competence.

Ask them how they can help you and be critical about the answers.

It is important to find out if your bank and an adviser have the required experience and competence.
If they do not, you may need to find an alternative.

Ask them how they will provide the necessary experience and competences. One might imagine cooperation with another bank.

Ask them how they can help you.

No ... !

It is important that you get a bank and a counselor with the necessary experience and competence.
You may not need to change banks if you are satisfied with your current bank. One might imagine that your bank can work with another bank on the task.
Ask them how they can help you.


07. How does the farm of your dream look like?

Size?

It is important that you are realistic with your ambitions.
The investment must be able to be financed, but it shall also be able to earn enough money to reward the invested capital, reinvest, develop and pay a salary to management, regardless whether it be yourself or an employee.

It is also important to consider the requirements for climate, land quality, landscape and infrastructure.
Should the landscape be as flat as possible or should it be more or less sheltered?
Should the soil be free soil or must there (also) be a stand?
Is it a production property you are looking for or has the nature also worth to you?
Choice depends on your strategy, wishes and needs.

Det er vigtigt at være realistisk med sine ambitioner.
Investeringen skal kunne finansieres, men den skal også kunne tjene penge nok til at forrente den investerede kapital, geninvestere, udvikle og betale en løn til driftsledelsen uanset om det er dig selv eller en ansat.

Det er også vigtigt at overveje hvilke krav man har til klima, bonitet, landskab og infrastruktur.
Skal landskabet være så fladt som muligt eller skal det være mere eller mindre bakket?
Skal jorden være fri agerjord eller skal der (også) være en bevoksning?
Er det udelukkende en produktionsejendom du søger eller har herlighed også en værdi?
Valget afhænger af din strategi, ønsker og behov.

Det er vigtigt at være realistisk med sine ambitioner.
Investeringen skal kunne finansieres, men den skal også kunne tjene penge nok til at forrente den investerede kapital, geninvestere, udvikle og betale en løn til driftsledelsen uanset om det er dig selv eller en ansat.

Det er også vigtigt at overveje hvilke krav man har til klima, bonitet, landskab og infrastruktur.
Skal landskabet være så fladt som muligt eller skal det være mere eller mindre bakket?
Skal jorden være fri agerjord eller skal der (også) være en bevoksning?
Er det udelukkende en produktionsejendom du søger eller har herlighed også en værdi?
Valget afhænger af din strategi, ønsker og behov.

Quality and bonitude?

Are you focusing on cultivation of plants or are you looking for a combination with e.g. animal husbandry?
Do you want to make conventional farming or are you an ecologist?
Requirements for climate, bonitude, landscape and infrastructure, etc. are different depending on your choice of production.
Quality of soil can not be changed. Only affected.

Requirements for climate, bonitude, landscape and infrastructure, etc. are different depending on your choice of production.
Reconsider your strategy. It must be set from the beginning.
Quality of soil can not be changed. Only affected.

If you do not have an interest in cultivation of plants and want to focus on animal production, then you may benefit from establishing your production unit in a relatively small area at an established plant producer who is interested in e.g. delivery of crops to your production and removal of manure for fertilization and improvement of his soil structure. There may be situations where both parties gain a great deal from such an agreement.

Cultivation of plants?

Are you focusing on cultivation of plants or are you looking for a combination with e.g. animal husbandry?
Do you want to make conventional farming or are you an ecologist?
Requirements for climate, bonitude, landscape and infrastructure, etc. are different depending on your choice of production.
Quality of soil can not be changed. Only affected.

The strategy for cultivating the soil must be set from the beginnig. Reconsider the whole concept and start all over again.

If you do not have an interest in cultivation of plants and want to focus on animal production, then you may benefit from establishing your production unit in a relatively small area at an established plant producer who is interested in e.g. delivery of crops to your production and removal of manure for fertilization and improvement of his soil structure. There may be situations where both parties gain a great deal from such an agreement.

Animal husbandry?

Are you focusing on animal production or looking for a combination e.g. with crop?
Do you want to drive conventional farming or are you an ecologist?
If you do not have an interest in cultivation of plants and want to focus on animal production, then you may benefit from establishing your production unit in a relatively small area at an established plant producer who is interested in e.g. delivery of crops to your production and removal of manure for fertilization and improvement of his soil structure. There may be situations where both parties gain a great deal from such an agreement.
Of course, it is an advantage if the strategy is established from the beginning, but it does not have to be crucial to your project.

Of course, it is an advantage if the strategy is established from the beginning, but it does not have to be crucial to your project.

Nej                                                                                                                                                .

Machinery?

Do you need many machines?
Do you already have all the machines you need?
Do you want to take over the seller's machines?
Do you prefer to buy new equipment?                                                                                                   .

It is important to have an idea of how the investment needs to be mechanized, but not crucial before you start looking at an investment.
The seller has often an existing machine park and it may be of benefit to both parties that it is part of the deal. Consider it.

You do not want machines to be included in a transaction.
Do you already have the machines you need?
Do you want to take over the seller's machine park?
Do you prefer to buy new equipment?
The seller has often an existing machine park and it may be of benefit to both parties that it is part of the deal. Consider it.                                                                                                   .

Farm buildings?

Existing operating facilities are rarely optimal for a new owner.
It may be old buildings that are rebuilt for the present purpose and may not be appropriate, rational or intentional to what a new owner will use them for.
You must be very careful when valuing existing operating buildings, whether they are new or old.                                                                                                   .

Existing operating facilities are rarely optimal for a new owner.
It may be old buildings that are rebuilt for the present purpose and may not be appropriate, rational or intentional to what a new owner will use them for.
You must be very careful when valuing existing operating buildings, whether they are new or old.

It is rare that you can buy a piece of farmland completely without any kind of building stock, but you might have to let these buildings be part of the transaction in order to get the deal done.
Existing operating facilities are rarely optimal for a new owner.
It may be old buildings that are rebuilt for the present purpose and may not be appropriate, rational or intentional to what a new owner will use them for.
You must be very careful when valuing existing operating buildings, whether they are new or old.

Residential property?

Existing residential houses are often of poor standard and it may be complicated if a housing of a certain standard is an indispensable requirement.
We recommend to be focusing on the operating potential and to be flexibile on the residential property.
It is often advantageous, in the first place, to buy/rent a property nearby, and then maybe build a new residential house later.

We recommend to be focusing on the operating potential and to be flexibile on the residential property.
Existing residential houses are often of poor standard and it may be complicated if a housing of a certain standard is an indispensable requirement.
It is often advantageous, in the first place, to buy/rent a property nearby, and then maybe build a new residential house later.

Yes, we recommend focusing first on the operating potential and to be flexibile on the residential property.
Existing residential houses are often of poor standard and it may be complicated if a housing of a certain standard is an indispensable requirement.
It is often advantageous, in the first place, to buy/rent a property nearby, and then maybe build a new residential house later.


08. We can help you.

Jesper Kjaer ApS is a diversified developer and broker company. Our position is based on a deep understanding of local opportunities - and the ability to be at the forefront of tomorrow. We take pride in being a committed partner and we have made it our brand to make the impossible possible. Development and mediation of business abroad is a complex process, but we never forget what creates value for our customers.
We do our utmost to identify the right investment object and to ensure a successful transaction by making use of the extensive network we have built up over the past 16 years.

Jesper Kjær ApS works in investor interest. After a transaction, transaction fees are settled, according to the mediation agreement.


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The investigation phase:


01. Privacy Agreement and Confidentiality Agreement.

Both Buyer and Seller often have to share information with the other that he does not want to pass on to others. It is often advisable to sign a confidentiality agreement at an early stage. That way, there is no doubt when something became confidential.


02. Selection of acquisition candidates and analysis.

Selection of acquisition candidates?

We suggest that we spend some time preparing for which properties there should be purchase candidates before the first inspection.
Some investors just want to look at as many properties as possible. It may not be the best idea, because it can be more confusing than enlightening. There are often very distant distances that you will spend a lot of time traveling and it can be difficult to distinguish relevant and irrelevant information.

When choosing, you should for example ask yourself:

  • Is it maybe the property I'm dreaming about?
  • Can I produce what I want on that property?
  • Can I sell my products?
  • How can I possibly fund the purchase?
  • Is the investment profitable?


We would like to be one of your sparring partners in preparing this analysis.

It is important that you bring yourself in a position where you can make decisions - on an informed basis. "A sense of mood can not stand alone."
We have examples of investors who buy the first item they see and others who never decide because there may be something better tomorrow.
None of the parts are optimal and probably most of all indicate that you have not been realistic and honest about yourself in the preparation phase.


What is the Seller to sell and what is it I can buy?

The object for sale is often an ongoing business. A company like the current owner may have been operating, "for good and bad", for decades, or or it was maybe even in the family's ownership for generations.

Many investors often get frustrated when they find that the seller either cannot decide or change his minds It may be both the first and last time he is involved in a transaction. "He can only sell one time" and that means everything for him to do right and he may not be fully aware of what he wants and can sell. He dont know what is the best for him.

Shall the transaction object be a holding company, operating company, land owned, leased land, animals, machinery, stock, breeding, rights, contracts, etc. etc.

There are usually more options and it usually pay off to be a bit flixible and go for a compromise.


Balancing of expectations?

Once you have selected some acquisition candidates, then it is a good idea to prepare a small initial budget, based on standard yields and prices, and calculate profitability at different price scenarios.

Both parties must have realistic expectations, if a transaction shall happen.


Screening of funding options?

If you already have a positive commitment from those who will fund you, it's time to make a survey.


After you have chosen one or more acquisition candidates and expectations are ballanced, then it's time to schreen the funding options.

It's not easy so easy to finance agriculture abroad, as it was just a few years ago, and before spending time and money exploring opportunities, it's a good idea to talk to both your own bank and local banks about general opportunities for financing and what it may cost.



03. The first visit and survey.

Once you have selected one or more purchase candidates, we will arrange the first visit.
The purpose of this visit is to get a first impression - "get a stomach feeling" - evaluate quality and bonitude, operating condition, buildings conditions, machines conditions, etc.

Ask yourself again:

  • Is it maybe the property I'm dreaming about?
  • Can I produce what I want on that property?
  • Can I sell my products?
  • How can I possibly fund the purchase?
  • Is the investment profitable?

If all responses are positive then we will continue - otherwise it will be back to the "thinking box".


04. The second visit and survey.

If first inspection is positive after you've slept on it a few nights, then we arrange another inspection of the property, maybe together with as if be done with technical advisors.

It is also now we begin collecting more information for the next budget.


05. Project description, roadmap and budget.

If you still have an interest and a reality for a purchase, then it's a good time to describe the project, prepare a roadmap and improve the budget.

It is good to develop a good and detailed project description, which is backed up by a realistic roadmap, timetables and budgets. Those who may finance you must understand what you want and see the connection to your budgets. The budgets should be prepared in cooperation with your auditor.

Be conservative and careful. Agriculture is an investment for life. It is first and foremost you who have something to win and to lose.


06. Financing.

It's good that you already have prepared the funding, but if you have not already presented your updated project description, roadmap and budgets for those who are financing you, then it's a good idea to do it now.

Focus on that what you specialized in and do not play the financier. If there is an exchange rate risk, it must be secured, although well-intentioned advisors may show that historically there is no big risk in a particular currency. There are thousands of examples of healthy businesses that have been ruined by funding in e.g. Swiss Franc etc. ....

However, there may be reason to finance in a currency that is cheaper than the local, but only if you can ensure exchange rate risk, for example by selling some of your products in that currency.
Be generally careful and conservative regarding funding. Only trust yourself.
Talk to more banks, both at home and locally.

Have a financing plan prepared and get (conditional) funding commitments.

Once you have prepared your project description, roadmap and budgets, it's time to present your project for those you plan to finance the project.
Prepare your presentation thoroughly, be well prepared and meet personally. Prepare your questions in advance.

Focus on that what you specialized in and do not play the financier. If there is an exchange rate risk, it must be secured, although well-intentioned advisors may show that historically there is no big risk in a particular currency. There are thousands of examples of healthy businesses that have been ruined by funding in e.g. Swiss Franc etc. ....

However, there may be reason to finance in a currency that is cheaper than the local, but only if you can ensure exchange rate risk, for example by selling some of your products in that currency.
Be generally careful and conservative regarding funding. Only trust yourself.
Talk to more banks, both at home and locally.

Have a financing plan prepared and get (conditional) funding commitments.


07. First business plan to be prepared.

After you ascertain that you want to invest and you have (conditional) funding commitments, it's time to prepare the first detailed business plan.

The business plan is a good tool for yourself when you need to negotiate with the seller and to the communication with the banks.


08. Selection of advisors.

Attorneys, accountants and tax advisors are to be chosen both in your home country and where you want to invest.
It is important that the advisors have experience and knowledge of eg. corporate relationships, corporate structure, taxation, holding companies, operating companies and international contracts within this particular area (e.g., a lawyer used to dealing with house trades (or divorces) in your home country, is perhaps not the best adviser in an agricultural transaction abroad).

We recommended that the advisors get direct contact with each other once you have made your choices, but it is important that you maintain the overview, coordinate the process yourself and keep the control.

We can assist you in selecting the advisors who have the necessary experience.


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The negotiation phase:


01. Initial Negotiation with Seller

We agree a negotiation strategy and initiate negotiations with Seller.
The major matters and the asking price are finally clarified.
Here Seller and Buyer should preferably come to a common understanding of the price, how the transaction should take place, what it should contain etc. etc. (We often experience frustration because the price and transaction matters are not resolved at a much earlier time, but we negotiate on several fronts and it is about getting the best result - overall.)

Many investors mistakenly believe that they can achieve a discount on the price by giving the impression that the property is too expensive for them. It works the other way arround The Seller does not give a discount of pity for the Buyer. If Seller is not convinced that Buyer is able to pay as agreed, then Buyer should not expect him to be forthcoming. It is a much better strategy to show that you are a strong Investor and then negotiate a discount on that premis.

There are no binding offerings during these negotiations.
Definite purchase offers are subsequently prepared later by your lawyer in the form of a conditional and detailed purchase contract. The design depends on the final nature of the transaction.


02. Declaration of Intent.

Once Buyer and Seller have agreed on how a transaction shall take place, it is a good idea that Buyer writes what has been agreed in the form of a 'Declaration of Intent'.
It is a great advantage if a statement from the bank that they will finance you, is attached.

The 'Declaration of Intent' must be non-binding. It's not a bidding offer, just a clarification of what has been agreed for now. Final purchase offers are subsequently prepared by your lawyer in the form of a conditional and detailed purchase contract. The design depends on the final nature of the transaction.
In addition to the fact that it's good to get the status written down and to match the understanding, Seller often needs to document the status to his potential partners, investors and/or creditors in order to make a decision.


03. Final negotiations.

Efter at ’Hensigtserklæringen’ er afleveret, er der som regel et eller flere opfølgende forhandlinger, hvor man måske ”lægger arm” endnu en gang inden man endelig bliver helt enige.

Første vejledende tidsplan aftales.


04. Preparation of Conditional Purchase Agreement.

Once you have agreed on all details, it is time to get the lawyers to draft a Conditional Purchase Agreement.

This Agreement can be very simple if you, for example are buying shares in an existing company or much more complicated if you buy different assets. It depends entirely on the final nature of the transaction.

The Conditional Purchase Agreement is typically prepared jointly by the Buyer and Seller's lawyers.
We recommend that the buyer's lawyer draft first version.

This document is your final offer to purchase, under certain predefined conditions, and is binding upon submission of the signed to Seller.
(An important condition in the Conditional Purchase Agreement is; that Buyer declares himself satisfied with due diligence (examination of state)).
Derfor er det ekstra vigtigt at dokumentet er udarbejdet omhyggeligt og er gennemtænkt.

Conditional purchase agreement should be approved in advance by bankers, lawyers, accountants, tax advisors and other stakeholders, etc. before it is signed and delivered to the seller.

Depending on the course, the technical, legal and financial due diligence starts here or, as it is preferable, during the purchase phase.


05. Final business plan, budget and payment plan

At the same time as the Conditional Purchase Agreement is prepared and approved, final business plan, budget and payment plan shall be prepared and approved by any partners, banks, lawyers, accountants, tax advisors and other stakeholders, before the signed Conditional Purchase Agreement is signed and handed out to Seller.


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The purchase phase:


01. Signature of Conditional Purchase Agreement

After the final version of the Conditional Purchase Agreement has been approved together with the related final business plans, budgets and payment plans, by partners, banks, lawyers, accountants, tax advisors and other stakeholders, the buyer signs the document and hand it over to the Seller for his signature.
Subsequently, the Seller also signs the Conditioned Purchase Agreement.

The Conditional Purchase Agreement must maybe be signed before the notary and, if necessary, in the presence of the seller, depending on the country and the nature of the transaction.


02. Due diligence (state verification)

After the Conditional Purchase Agreement has been signed, there is a basis for conducting due diligence (state verification).

Due diligence is usually divided into technical, financial and legal due diligence, and is a careful review of whether the actual is in line with the information given and potentially if the Seller has made what was agreed.
The technical due diligence is usually carried out by the Investor himself in cooperation with e.g. his agro consultant and other technical advisors.
The financial due diligence is usually performed by an auditor in cooperation with the lawyer.
The legal due diligence is usually carried out by a lawyer.

In the end, the three Due Diligences shall prove to what extent the actual is in line with the information given. (There are almost always minor or more deviations)

If the Investor declares himself satisfied with the result of due diligence, then the business plans, budgets and payment plans shall be updated and the transaction will be completed.
If the Buyer declares himself dissatisfied with the result of due diligence, then Seller shall either correct the defects found and/or Seller & Buyer agrees on new terms or they cancel the transaction.


03. Completion of final purchase agreement.

Once the Investor has declared himself satisfied with the result of due diligence, the final Purchase Agreement will be prepared.
The final Purchase Agreement is usually a slightly revised version of the Conditional Purchase Agreement.

The Final Purchase Agreement may need to be signed in front of the Notary Public and perhaps under the presence of Seller, depending on the country and nature of the transaction.


04. Execution of the transaction.

Removable property, inventories and stocks, etc. are counted/measured and consumption meters read by Buyer and Seller, as close to the transaction date as possible. (Preferrable on the day of transaction).

The purchase contracts are signed (possibly in front of the Notary Public), payment is made and the transaction is completed.

Buyer and Seller's lawyers will subsequently prepare a refund statement, related to counted/measured/read removable property, inventories and stocks, consumption etc.


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We are constantly working to improve the Investment Checklist and to share our experiences with others.
Do you have any ideas for improvements, found errors, has critique or comments; then we'd love to hear from you.
Thank you in advance.

Jesper Kjaer
Telephone: +45 5136 1495      
e-mail: jk@jkaps.dk      
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