Expertise/IT and Technology Companies

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Investments and Transactions Involving IT Companies

When an IT company, an interest in it or rights to a product are sold, the buyer checks who owns the rights to the product. Investment in the capital of a technology company is documented by an investment agreement and a corporate agreement.

We are most often instructed by:

  • Founders and participants selling a company or an interest
  • Buyers of IT companies and products together with their teams
  • Start-ups and IT companies raising investment
  • Investors taking an equity stake in an IT company
  • Parties to agreements for the assignment of rights to a product

The information on this website is provided for information purposes only and does not constitute a public offer.

What the Service Includes

Timing and Fees
–timing on request
from ₽fee on request

Timing and fees are indicative and are confirmed when the engagement is agreed.

01 / Overview
What the buyer checks

In a transaction involving an IT company, the buyer or investor checks the product above all: whether the rights to it belong to the company rather than to developers and contractors, which third-party components it includes and on what terms it is provided to customers. General issues of investment transactions and due diligence are described under the “Venture Deals” and “Legal Due Diligence” services.

The consequences of a change of participants for the company's accreditation and for the product's entry in the Russian Software Register are checked separately: after the transaction, the requirements concerning the composition of the rights holder's participants may cease to be met.

The procedure for processing the product's user data and the contracts with key customers are also checked: provisions on change of control and on termination of the contract if the company is sold.

02 / Outcome
Service Outcome
  • Due diligence findingsA list of gaps in the rights to the product, contracts and data processing, with an assessment of their impact on the price and the representations.
  • Transaction documentsA sale and purchase agreement for interests or shares or an agreement for the assignment of rights to the product, an investment agreement, a corporate agreement and amendments to the charter.
  • Terms for the teamFounders' exit terms, options and obligations of key employees in the transaction documents.
  • Closing materialsApprovals and consents, documents for registering changes, handover certificates for the product, access credentials and documentation.

The outcome of the service is the work performed within the scope agreed with the client.

03 / Projects
Selected Projects
01 / 04

Purchase of a group of companies

Purchase of a producer of digital solutions for equipment management and monitoring

Challenge

Advising the buyer on the acquisition of shares in a foreign company that owns a Russian manufacturer of industrial equipment and digital solutions for equipment management and monitoring. The acquisition of the foreign company was governed by English law.

What was done

Comprehensive legal due diligence of the Russian business was carried out, covering its contractual relationships and intellectual property rights, and the foreign ownership structure was analysed. The findings were reflected in the terms of the transaction and the arrangements for its closing.

Purchase of an interest

Purchase of an interest in an app developer with an audience of more than 1.5 million users a week

Challenge

Advising the buyer on the acquisition of an interest in a company developing a healthy lifestyle app. The app's weekly audience exceeded 1.5 million users worldwide.

What was done

Comprehensive legal due diligence was carried out, covering business operations, corporate history, intellectual property rights, employment relationships and the legal risks material to the transaction. The findings were reflected in the structuring of the transaction and the preparation of the contractual documentation.

Investment transaction

Investment in a developer of 3D interior design solutions

Challenge

Advising on an investment transaction involving a company that develops 3D interior design solutions. The structure provided for the grant of an option right to the investor.

What was done

The project's founder was given the possibility of buying this right back before the investor exercised it. The terms of such a buy-back and the consequences of changes to the parties' arrangements on future equity participation were agreed.

Convertible loan

Convertible loan for a company developing an educational course platform

Challenge

Advising on an investment in a company developing a platform that aggregates educational courses, made by way of a convertible loan.

What was done

The terms of the financing and of the investor's future entry into the company's capital were determined, including the conversion parameters and the consequences of different scenarios for the transaction. The engagement covered agreeing the documents and the procedures required to implement the transaction.

04 / Questions
Frequently Asked Questions

The gaps are remedied before signing if the people who worked on the product are available and willing to execute the documents. If not, the gaps are reflected in the terms of the transaction: through the seller's representations, an indemnity for losses or a deferred portion of the price.

The corporate documents and the documents on rights to the product are collected, and the gaps that the buyer will find in due diligence are identified. Once the key terms have been agreed, every gap identified affects the price.

It is checked which obligations to employees have been documented and which were given orally or in correspondence. Documented options are exercised or bought out on the terms of the transaction; undocumented promises are taken into account when agreeing terms with the buyer.

Support is provided on one side of the transaction: that of the seller, the buyer or the investor. The other party's documents are checked for consistency with the agreed terms.

An hourly rate, a fixed fee or a combined model is used; in some cases part of the fee depends on the outcome achieved. The fee is determined by the time actually spent, the complexity of the matter and the overall timeframe of the project, and is agreed before work begins.

Key Contacts
Deni Murdalov Deni Murdalov Partner, PhD (Law), LL.M. Ilya Smirnov Ilya Smirnov Partner

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Other Services in This Practice
Software Development Agreements Licence Agreements and Service Access Rights to Code Personal Data Website and App Documents Ministry Accreditation Tax Incentives Russian Software Register Product Registration Documents and Consultations

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