Skip to Content
Focus is on a hand on a boardroom table with the other meeting attendees blurred in the background.
Article

Best practices to avoid post-merger disputes

March 5, 2018 / 1 min read

Successful deals should be a time to celebrate. But post-merger disputes are becoming the new norm for M&A activity. With the inherent complexities of ownership change, don’t let these five areas cause undue turmoil. Read more at PE Hub.

Whether you’re buying or selling a company, post-transaction should be a time for celebration about getting the deal done and excitement about the future. But many deals quickly devolve into disputes over the finer points, from purchase-price adjustments and working-capital disputes to whether negotiated earnout metrics are attained.

Post-merger disputes have become an endemic problem. According to SRS Acquiom research, in 2016, 39 percent of deals included a separate escrow specifically for post-closing purchase-price adjustments. The average agreement holds back 10% of the deal value in a general escrow account and some can hold back 15% or more. Deals valued at $50 million or less tend to withhold larger escrow percentages, making it particularly important for middle-market companies to follow best practices during negotiations in order to minimize disputes.

With M&A activity expected to gather even more steam in 2018, buyers and sellers should pay particular attention to five areas that can generate the most trouble after the deal is done.

Read More

Related Thinking

Business professional in a modern office building looking at their laptop.
July 3, 2024

PE platform acquisitions: 7 essential considerations for due diligence

Article 5 min read
Private equity professionals use data analytics to optimize resources, reduce transaction risk, and streamline due diligence
January 5, 2024

Data analytics & due diligence: Key ways to drive value creation

Article 7 min read
Two business professionals walking down a set of steps together.
March 31, 2023

Six critical private equity due diligence considerations

White Paper 24 min read