Two words, a world of assumptions, fears, hopes, and expectations. The question of what is or isn’t “market” can cause significant friction between parties in a merger, acquisition, or another kind of business transaction. At the same time, a buyer or seller with knowledge of larger market forces and trends is well-equipped to negotiate and avoid unfavorable deals.
In the interest of promoting M&A education and transparency, I would like to share some key data about the current market. Below, you will find graphics showing breakdowns of recent deals by industry sector and governing law, the forms transaction commonly take, the frequency of simultaneous signing and closing, and the percentages of agreements that include purchase price adjustments as well as those with escrow/holdout and earnout provisions.
In the weeks to come, I will explore each of these charts in greater depth. Be sure to stay tuned to M&A Pulse for updates.
The following information is benchmarked from 2018-2019 private market transactions of $100 million or less in enterprise value. All data belongs to and is sourced from Practical Law.
M&A Transactions by Industry Sector
M&A Transactions by Governing Law
M&A Transactions by Form of Transaction
Frequency of Simultaneous Signing and Closing
Frequency of Purchase Price Adjustments
Frequency of Escrow/Holdback Provisions
Frequency of Earnout Provisions
ABOUT MIKE MERCURIO
Michael N. Mercurio is a leading attorney in the field of mergers and acquisitions (M&A). He serves as outside general counsel in buy-side and sell-side M&A, as well as in all business law and real estate law matters. As a strategic partner to firm clients, Mr. Mercurio regularly counsels entrepreneurial individuals and assorted entities on the many challenges, issues, and opportunities companies face throughout the business lifecycle—from start-up to eventual exit.
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