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Impact of US Export Controls in the Sale of a Manufacturing Business

Jeffrey Richardson
Michigan Manufacturers Association Magazine
January 2017

An owner of a US business that manufactures export-controlled items (“Export Business”) nears retirement. The owner decides to sell the Export Business. In a win for the owner, the sale of the Export Business interests both US and foreign purchasers. However, selling an Export Business to a foreign purchaser immediately subjects the Export Business to US law affecting the transfer of export-controlled items, including software and technology, to foreign nationals. Is the Export Business prepared for a sale to a foreign purchaser?

Export Businesses will have differing levels of export control preparedness determining how quickly the Export Business can enter productive pre-sale discussions with a foreign purchaser:

To acquire an Export Business, a purchaser should perform export transaction verification due diligence, a classification of export-controlled items, including software and technology, as well as an investigation of any additional export controls compliance infrastructure that may be required by the purchaser. If the Export Business is unprepared, these steps take time, slow down the purchase, and ultimately increase costs to the US business owner. To maximize the sale price of your Export Business to both US and foreign purchasers assess your export controls preparedness now.

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