Entity Purchase vs. Asset Purchase: What to Know

In this week's issue:

• What to know about entity purchases vs. asset purchases

• Your step-by-step guide to planning a successful merger

• What a $10 billion pharmaceutical acquisition means for you

• Why you should never speak first during negotiations

Let’s dive in.

🧠 This Week’s Big Idea

Entity Purchase vs. Asset Purchase: What Founders Need to Know

When selling your business, one of the first things buyers (and their attorneys) will ask is:

“Are we doing an asset purchase or an entity purchase?”

It may sound like legal jargon, but the answer has massive implications for how the deal is structured and how much you walk away with.

The main differences between the two:

• Asset Purchase: The buyer picks and chooses specific assets and liabilities (like customer contracts, inventory, or IP). You’re selling parts of the business, not the entire entity.

• Entity Purchase: The buyer purchases the actual legal entity, such as stock or membership interest, and inherits everything — assets, liabilities, and obligations.

Most buyers tend to prefer asset purchases because they reduce risk. On the other hand, sellers often push for entity purchases because they’re simpler and more tax-efficient.

So how do you decide which option to go with? There are a few key things to consider:

• Liabilities and Risk: If your company has legal baggage, entity purchases transfer that risk. Expect more diligence (and potential negotiation).

• Tax Impact: Asset sales may be taxed twice — once at the company level and again when proceeds are distributed. Entity sales often qualify for capital gains.

• Deal Complexity: Asset purchases typically require assigning each asset and contract individually. Entity purchases are cleaner and faster to close.

If you’re preparing for an exit, it's something you should start thinking about sooner rather than later. Because the structure of your deal affects how long the process takes, what you owe in taxes, and what ends up in your pocket at close.

The good news? The right deal team can help you evaluate both options and position you for the best possible outcome.

So if you're planning for a future exit and want help sorting through this, reach out — we'll walk you through your options.

📰 Featured Blog Post

Integration Plan for Successful Mergers – Step By Step Guide

Selling your business and merging it with a new entity requires careful planning and execution. 

This guide walks you through the step-by-step process to follow if you want to create a successful strategy:

→ Read the blog

📰 In The News

Merck to Acquire Verona Pharma for $10 Billion

Pharmaceutical company Merck has announced it will acquire Verona Pharma for $10 billion.

Their aim with the acquisition is to diversify beyond its flagship cancer drug, Keytruda, reflecting a broader trend of consolidation in the pharmaceutical and biotech sectors.

In 2025 alone, global pharma and biotech M&A deals have totaled a whopping $105.3 billion, marking a 7% increase from last year.

Why it matters to you:

The acquisition just goes to show how important strategic alignment and diversification are in M&A activities.

For founders and business owners, it highlights the value of building a robust and innovative product pipeline that can attract interest from larger players seeking to expand their portfolios.

Need help positioning your company to appeal to potential buyers? Get in touch with Exitwise.

🗣️ From Brian

I've heard countless stories of founders who left millions on the table when it was time to sell their business.

And 9/10 times, it always came down to this one massive mistake:

They spoke first during negotiations.

→ Read the full post on LinkedIn

 That's all for this week. Until next time.

Best,
Brian