Resources

“Exit Strategy: How to Negotiate a Put and Call Agreement When Selling Your Business”

August 2012
Smart Business Dallas

Dykema’s William B. Finkelstein, a member of the Firm's Corporate Finance practice, was interviewed for Smart Business Dallas’ August 2012 article, “Exit Strategy: How to Negotiate a Put and Call Agreement When Selling Your Business.” The article discusses and the relative pros and cons of the types of deals that occur when buying or selling a business—for example, a buy/sell agreement, or a put and call agreement, etc.

Finkelstein notes that in these types of deals sellers, “may be thinking about scoring a quick payout and retiring.” Conversely, buyers look to keep the former owner and present management team under contract to take advantage of “[their] expertise, knowledge of the market, reputation and key relationships…” Finkelstein goes on to review different types of agreements, their advantages and disadvantages for the parties involved. He particularly focuses on put and call agreements as one option that may provide benefits to both buyers and sellers—that is, if such an agreement can be negotiated.

Finkelstein explains that put and call agreements require the buyer “to purchase the seller’s remaining shares, either all at once or staged out, or for the buyer to exercise the right to buy the remaining shares from the seller.” He then explains how best to determine the price of the put, including potential risks.

Click here to read the complete text of “Exit Strategy: How to Negotiate a Put and Call Agreement When Selling Your Business.”

Reprinted with permission. ©2012 Smart Business Network Inc. Reprinted from the August 2012 issue of Smart Business Dallas.