Management are pivotal to the success of any business and rarely more so than in a Private Equity-backed company. It is vital that their objectives and rewards are aligned so as to ensure a WIN-WIN relationship.
For most of the time before, during and after a transaction, management teams and their Private Equity owners are working towards the same objectives - whether it be to buy the target, run it successfully or sell it. However, at key points, rather than sitting next to one another, they are on opposite sides with differing agendas and desired outcomes.
Understanding this, and getting appropriate advice, can easily be overlooked by both sides. The impact of this can, in the worst instances, mean the difference between success and failure for all parties.
Having worked both within Private Equity-backed businesses and as advisors in Private Equity transactions, EMC’s Lead Advisory Team is uniquely placed to work alongside Management in this sensitive area.
EMC will input into the deal process, reviewing Term Sheets and Deal Structures, highlighting key elements and comparing these to current market trends.
We will assist in the negotiations on behalf of management to ensure that they are getting the right deal, as well as fully understanding the risks and the documents that they will be signing up to.
All with an eye on the prize, working collaboratively for the Team, whilst being sensitive to the needs of Private Equity owners and the transaction as a whole
Key Considerations:
- Deal structures
- Sweet equity
- Dilution
- Leaver provisions
- Fees and charges
- Drag and tag rights
- Restrictive covenants
- Warranties
