Would you let the employees of the target co-invest in the deal ?

A few questions you could ask yourself around this: 1. what is the context for doing so? is it to share the burden of acquisition or to lock them in? Initially I would not offer it to anyone I am not sure of or do not know or have the confidence in the fact that they will "Match" the "Family Photograph" of what you are planning to do in terms of building the culture of your future acquisition. 2. Cold you perhaps go in with an intention to offer a staff equity plan and build the plan in the first 18 months while at the same time assessing who you may invite into the fold? 3. Ask yourself "who would I be comfortable with around my table (board room and Sunday lunch with the family) as shared equity in a SME is about a relationship first and a transaction last. 4. Am I wanting to do this out of fear (skills leakage, staff attachment to old owner, etc) or am I doing this for the right reasons?

Hi Yves, in the context of European institutional buyouts, this is usually done (more senior management only) and typically structured via participation in the management equity program (i.e. same as sponsor/searcher to ensure incentive alignment). In a UK context a lot of mid market companies also employ LTIPs and other cash-based schemes for their employees.