We are working on a deal where we would gradually buy-back the shares of the seller over a 3 year period. This is a UK deal.
We will hold a 40% of the shares of the business from day 1, with veto rights at board level (for both buyers and seller). If for some reason we fall apart, then there is mechanism in place to buy-back our (buyer) shares.
This structure has been designed to ensure the seller (who is absolutely critical for the business today) stays involved in the business and get some upside looking forward.
A significant part of the equity can come from the buyer.
I am very comfortable with the deal from a financial standpoint. But:
Sanity check - am I crazy proposing this kind of structure in the first place? Would you do it as a searcher?
Second question - would this structure deter you from wanting to know more about the deal?
Thanks (as always) for you wisdom and insights!
Raising equity in a gradual share buy-back deal
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