Hi all,

I am currently negotiating an acquisition. The company owner has expressed the desire to retain 30% of the equity post acquisition. Therfore instead of acquiring 100% (which was the goal initially, the transaction is about acquiring 70% of the company.

His motives are that he believes in the company and the project and he would like his children to inherit some shares of the company (his father founded the company). I should also specify that one of his child is a junior employee in the company.

What are the pro and cons of such a configuration where the owner doesn't want a full exit?

If i was to agree, should the owner become a shareholder in the search fund vehicle (through some swap actions or other mechanisms?) or is it better he stays a shareholder of the company?

Should he be at governing bodies (board) as his level of share would entitle him ?

Are there any subjects to keep in mind in this situation?

I am asking also because i am doing a self funded search and i don't have yet an investor base vested in the search fund (they could have helped) as in a traditionnal search (probably one of the negative side of self funded search).

Thanks in advance for your help,