When selling to PE, key issues are investment agreement terms – earn-out, corporate governance, minority rights, and exit mechanisms.
Private equity funds are professional investors that always seek to secure their interests in the investment agreement. Sellers should pay particular attention to the earn-out structure (tying part of the price to company performance), the fund’s corporate rights, and exit mechanisms.
It is also essential to define post-transaction management rules (corporate governance) and the role of existing shareholders. An experienced legal advisor can help negotiate terms to minimize risks and ensure a fair balance between the parties.
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