Pharmacy Sellers/Buyers: New Jersey Sale & Purchase Agreements

By Brad MacLiver
Authorship and profile at Google


A Pharmacy Listing Agreement is a contract that provides pharmacy brokers with the business seller’s permission to sell their New Jersey drug store. In the midst of the process of presenting the business being sold to qualified drug store buyers, there will be crucial negotiations and preliminary offers.

After preliminary stages have been negotiated, it will then be time to put the details of the potential pharmacy transaction forth in the form of a contract. This contract is traditionally called the Purchase and Sale Agreement, but it may also be referred to as a Pharmacy Asset Purchase Agreement, an Asset Purchase and Sale Agreement, Asset Purchase Agreement, or any other variation of these contract titles. Whatever the title is on the contract, this document should be considered the “blueprint” for transferring the pharmacy business to the new owner.  

The Pharmacy Purchase and Sale Agreement details how much the buyer agrees to pay and what assets the New Jersey seller is conveying to the buyer. When the agreement is put in writing and it describes the transaction in some detail then is accepted and signed by both parties, this contract is now a legally binding agreement. So, during the phase of negotiation, the Pharmacy Purchase and Sale Agreement should be developed with proper diligence.

Due to liability issues it is seldom that a pharmacy’s corporate stock will be purchased. Therefore, these transactions almost always are only asset purchases.

Elements of the Pharmacy Purchase and Sale Agreement include, but are not limited to: assets being purchase, assets being excluded, aspects of counting and purchasing the inventory, both electronic and hard copies of pharmacy customer files, liabilities, purchase price, closing date, transferring title of the assets being purchased, pharmacy customer file conversion, representations and warranties, non compete, restrictive covenants, transferring the phone, notifying customers, signs, Board of Pharmacy notification, accounts receivables, employment of business seller and pharmacy employees, confidentiality, counting the pharmacy’s inventory, costs associated with the closing, lien searches, actions to be taken before the date of closing, along with the pharmacy’s computers, office equipment, and any automated filling machines.

Although it covers many aspects of transferring the business assets from the New Jersey pharmacy seller to the new owner, it should be understood that the Purchase & Sale Agreement does not provide tax and legal guidance for the seller. Those issues do not pertain to the buyer of the assets. Therefore, the pharmacy seller should be well advised by a knowledgeable pharmacy broker, accountant, or attorney regarding tax consequences, restrictive covenants, the pharmacy valuation, and the structure of the deal. These aspects of the deal may not have any impact from the buyer’s point of view, but if not considered carefully may have affects to the seller’s financial position after the transaction is closed.

New Jersey pharmacy owners that are considering to sell their drug store will benefit when working with specialists who operate exclusively in the pharmacy industry.  They can provide expert guidance when bringing about transactions that provide the most benefits regarding the seller’s family and estate planning and tax consequences. A blueprint and proper planning that structures transactions appropriately will increase the net amount of money the seller in New Jersey receives for the pharmacy’s assets.

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