The deal structure in an M&A transaction is the collection of terms and conditions that encompass the deal. Three traditional ways of structuring an M&A deal are through an asset purchase, a stock purchase, or a merger. The preferred deal structure is usually agreed to in the Letter of Intent. Once due diligence is complete, …
Tag: deal structure
Can a Minority Shareholder Block an Acquisition?
When you have multiple stockholders you typically have a stockholders’ agreement in place that all stockholders are required to sign. That will usually have what’s called a drag-along provision which states that if the majority of stockholders either approve a sale transaction, everyone else is required to go along with it. If you have a …
3 Reasons Deals Fall Apart Post Letter of Intent
Remember that just because a deal is announced, it doesn’t mean it will go through. A record number of M&A transactions announced in 2015 have been cancelled bringing the total deal value down from $4.374 trillion to $78 billion. Unfortunately cancelled deals mean a lot of time, resources and effort were wasted putting together these …
What is a Minority Investment?
Minority investments are a creative way to think about transactions, one that is often overlooked. When we create a transaction with a company, there is a spectrum of possible involvements—everything from an informal strategic alliance to a 100% acquisition. A minority investment is somewhere in between these extremes. Typically consisting of a quarter to a third …
