Anyone completed diligence post close? How did you structure the terms?

by a searcher from Indiana University at Bloomington

1 year ago

I am interested in understanding how to speed up acquisitions for owners who need to exit rapidly (health reason, family issue, personal issue, etc). I've heard that it's possible to setup a structure using holdbacks/ clawbacks and other means to do this. Thus, I'd be curious if anyone on the forum has done this, how it was structured, and during diligence, if you found any gotcha's or show stoppers, how did you go about negotiating those? 

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searcher from Indiana University at Bloomington

Thanks all. Sounds like there aren't many folks who have done this and many who view this as too risky. All good. I found someone who has done several deals like this. Essentially, they set up a 100% seller financed deal and then setup a bunch of clawback provisions, warranties, covenants, etc. So it's doable....but as others have suggested, could be a headache.

1 year ago | like reply | 0 likes

searcher

I highly recommend DD pre close, after acquiring my business last year, I did a subsequent mini - acquisition in the fall and did DD afterwards and found plenty of issues on the legal side; all physical assets were accounted for, but there were other things that took a lot of digging to find via attorney.

1 year ago | like reply | 0 likes

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