Tycoon earning money on lucrative investment project, sandglass measuring time


As private equity deal financing gets harder, sellers are granting favorable deal terms to buyers, such as deferred or performance-based payment, in order to close transactions.

Dealmakers say these structures also help bridge a growing valuation gap created by growing economic uncertainty and a tighter debt market. 

“People find ways to get the transactions done,” said Markus Bolsinger, co-head of law firm Dechert‘s PE practice.  

One solution has been to include one or multiple provisions known as earnouts that allow buyers to defer a portion of the purchase price and make the remaining payments only when the purchased company meets certain milestones, such as reaching an earnings target, getting a regulatory approval or accomplishing a strategic sale…

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Also of interest: “Pressure continues to mount on VC“.

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