Price and Terms of the Deal

Price and Terms of the Deal

November 2, 2023 by investor

Price and Terms of the Deal

In negotiating the M&A transaction both price and terms will be discussed.

While the top-line buyout number is the main focus, the underlying terms should also be considered carefully.

Here’s a list of terms to review:

Payment amount — how much and when will the payout occur?

Who gets paid — payment goes to those on the cap table but there may be other factors at play.

Payment structure — how you structure the deal with regard to taxes and the legal entity of the company is a key factor to consider.

Employee impact — what is the plan for integrating the companies and how will it impact the employees?

Customer impact — in the event the buyout is to shut down a competitor then consider how it will impact those customers.

Earnouts — In the event of an earnout, the payment could be higher if sales targets are met.

The top-level price is important, but the underlying terms often determine if it is a good deal or not.


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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.