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Please Clarify the Basic Elements of a Deal Structure when Selling a Restoration Business?

Q: Please clarify the basic elements of a deal structure when selling a restoration business?  

JT says: Based on seller’s preferences, requirements, transaction size, financial trends and perceived risk (by buyer), deal structures may contain some/all of the following:  

Cash:  Funds received at the closing table.  

Fixed Notes:  Referred to as a Seller Carry-Back Note (SCBN), these are guaranteed fixed payments (including interest) over a certain number of months/years.  

Earnouts:  Agreements allowing the Seller to receive additional payments if the business achieves certain financial goals in the near future.   

Holdbacks:  A portion of the purchase price not paid at the closing table, but ‘held’ (short-term) in escrow to ensure there are no skeletons in the closet so to speak. 

Roll-Over Equity:  A portion of the Seller’s ownership stake getting ‘rolled over’ or invested into the acquiring company. (Can be very profitable investments.)  

Every deal is unique, yours will be as well.  If additional clarifications are needed for your specific situation, please reach out at any time. 

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