3 ms·
This type of structure creates risks around ability to pay which a well advised seller would try to avoid. You could design something which would mitigate that
by tomatocracy 3y ago
This type of structure creates risks around ability to pay which a well advised seller would try to avoid. You could design something which would mitigate that but it would likely end up costing more for the buyer to set up and run anyway.
In private deals (one where the company being sold is not directly listed), the traditional way to solve this problem is via earn-outs.
In both public and private deals, using the purchasers' stock as the acquisition currency is also relatively common.