When planning an M&A deal, structuring the deal matters. 

How are M&A deals typically structured?

First, the parties need to decide what is actually being sold? A company or group of companies? Specific income-generating assets? A going concern i.e. a distinct business operation? Or a start-up with perhaps little more than a proof of concept? Whatever is being sold will need to be carefully defined in the deal agreement with no room for doubt or uncertainty.

There are many ways to cut an M&A deal. Do you want a share sale?  An asset purchase?  A management buyout by existing management? A management buy-in by a new hungry but experienced team? A joint venture rather than an outright purchase/sale? Or perhaps just an exclusive license or supply contract? And should contingent consideration be used in case any surprises emerge?

Much will depend on tax, who is the stronger party and the overall circumstances.

Methods of sale include a regular sale, a trade sale by a financial institution or professional firm, an auction. A separate possibility may be an initial public offering on a stock exchange (IPO) where the founders sell their shares over time on the open market.

Next Steps Include:

• Start planning the ingredients of your proposed acquisition or sale based on the above.
• Are assets, activities or shares being sold? Etc.
• Will the consideration be paid in cash or shares? Immediately or over time? Contingent consideration or earn-out tied to the achievement of milestones? Etc
• IPO?
• Are there Stock Exchange reporting requirements?
• Has appropriate due diligence been performed?
• Is all the information needed available? In a virtual data room supplemented by management explanations?
• Are representations and warranties needed in the sale agreement in order to supplement due diligence review procedures?
• Will a minority interest remain or is 100% of the target being acquired?
• Many of the surprises may be predictable with proper preparation.
• What is the other side really after? Can you read between the lines?
• Consult legal and professional advisors in each country concerned in specific cases.
• Contact us if you are looking for an M&A candidate to buy or sell.
• Contact us if you have your candidate and want to prepare for an M&A deal.

© Leon Harris 19.5.25, all rights reserved.  Email: [email protected],  Cell: +972-54-6449398.

© Leon Harris 19.5.25, all rights reserved.  Email: [email protected],  Cell: +972-54-6449398,