Merger & Acquisition Deal Structures

 

The Ways To Pay For an M&A Deal

 

Overall, there are define three common ways to pay for a merger and acquisition ( M&A) deal. However, from a creativity standpoint, there are multiple variants of using these overall common ways:

 

1. Cash. If Buyer, Inc. uses cash in its bid, it will offer shareholders in Seller, Inc. a specific amount of cash for each share of Seller, Inc. 

 

2. Fixed-Value Stock. Buyer, Inc. may offer "fixed-value stock"--with a guarantee fixing the value of the shares it will pay--for each Seller, Inc. share. Put simply, in a fixed-value stock deal, the value of Buyer, Inc. shares offered to Seller, Inc. shareholders is completely fixed, while the number of shares offered fluctuates depending on Buyer, Inc. share price at closing date. This means that Buyer, Inc. shareholders bear all the price risks and rewards during the pre-closing period. Seller, Inc. shareholders face no price risk or reward, as they receive a fixed value of Buyer, Inc. shares.  

 

 

3. Fixed-Shares Stock. Buyer, Inc. may offer "fixed-shares stock"--with a guarantee fixing the number of the shares it will pay--for each Seller, Inc. share. Put simply, in a fixed-share stock deal, the number of Buyer, Inc. shares offered to Seller, Inc. shareholders is completely fixed, while the value of shares offered fluctuates depending on Buyer, Inc. share price at closing date. This means that Buyer, Inc. and Seller, Inc. shareholders share the risk and rewards of changes in Buyer, Inc. stock price during the pre-closing period. In a fixed-shares stock deal, Seller, Inc. shareholders can face significant risk that their newly issued shares in Buyer, Inc. will trade at a discount to the pre-deal price of Buyer, Inc shares.

 

Please note that a particular M&A deal may have more than one of the three components as part of its offer. For example, acquirers often make an offer using a combination of cash, and either fixed-value stock or fixed-shares stock. There are many creative ways to use the combinations to effectively structure payment for a deal.

 

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Merger Agreement & Joint Venture Agreement Templates

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Asset Purchase & Sale Agreement- DEF01

Stock Purchase & Sale Agreement: Common Stock, Shorter Version- DEF02

Stock Purchase & Sale Agreement: Common Stock, Longer Version- DEF11

Stock Purchase & Sale Agreement: Preferred Stock, Longer Version- DEF12

Distribution Agreement - DEF03

Exclusive License Agreement - DEF04

Joint Venture Agreement - DEF05

Marketing & Sales Only Joint Venture Agreement - DEF06

License Technology In Exchange For Stock Agreement - DEF13

Partnership Agreement - DEF07

Promissory Note - DEF08

Non-Disclosure Agreement : DEF09

Shareholder Agreement - DEF10


 

 

 

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Term Sheet/Letter of Intent Template

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Asset Purchase - M&A01

Asset Purchase - M&A02

Stock For Cash & Stock Purchase - M&A03

Stock For Cash Purchase - M&A04

Stock for Stock Purchase - M&A05

Earnout Purchase - M&A06

Joint Venture - M&A07

Product Distribution - M&A08

Product License - M&A09

Technology Development - M&A10

Series A Preferred - M&A11

Series B Preferred - M&A12


 

 

 

 

 

 



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Download Additional Agreement and Term Sheet Templates
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Distributor Agreement Joint Venture Agreement Stock Purchase and Sale Agreement Acquisition Confidentiality Agreement MARKET, INDUSTRY, AND COMPANY, RESEARCH
Merger Agreement -1 Merger Agreement -2 Merger Agreement -3 Merger Agreement -4 New Business, Product, and Startup Ideas
Letter of Intent to Purchase Business Letter of Intent to Joint Venture Basics of Buying or Selling a Business Presentation and Report Charts and Graphics - Big Time Saver!  

 

 Other Templates File Description
Exclusive License Agreement - Sample 1 Template to develop an exclusive license agreement with royalties between two parties (Word Document)
Exclusive License Agreement - Sample 2 Another template to develop an exclusive license agreement with royalties between two parties (Word Document)
Exclusive License Agreement - Sample 3 Another template to develop an exclusive license agreement with royalties between two parties (Word Document)
Non-Exclusive License Agreement Template to develop a non-exclusive license agreement with royalties between two parties (Word Document)
Agreement For Joint Technology Development, Licensing - Sample 1 Template to develop a comprehensive joint technology development, licensing, and marketing agreement between parties (Word Document)
Agreement For Joint Technology Development, Licensing - Sample 2 Another template to develop a comprehensive joint technology development, licensing, and marketing agreement between parties (Word Document)
Collaborative Research Agreement Template agreement to develop the term and conditions for collaborative research between parties (Word Document)
Joint Marketing Agreement - Sample 1 Template to develop a joint marketing and distribution agreement with compensation between two parties (Word Document)
Joint Marketing Agreement - Sample 2 Another template to develop a joint marketing and distribution agreement with compensation between two parties (Word Document)
How To Prepare A Business For Sale Step-by-step action plan on the specific tactics of what you need to do prepare your business for a successful sale with the highest potential value (Word Document)
Offering Memorandum or Sales Prospectus A document describing your business, its prospects, and why a potential purchaser should buy it.
Presentation for Approval to Buy/Sell a Business Provides the presentation framework and details needed to get a business sale or purchase approved by the board or other senior executives.
Transitioning Your Company Through A Sale Or Merger Presentation template with the step-by-step issues to be faced and processes involved as a company and the owners go through a business sale or merger. The step-by-step process is complete in that it starts from the first call/meeting and goes beyond post merger/acquisition integration (PowerPoint Document)

 

  

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