What types of deal are there … and which one is the best for you?
Deal structures are designed to be solutions to problems.
So when it comes to which type of deal is most applicable in your situation, the answer really depends on the problem you’re facing.
That’s because for each type of problem there’s a different type of deal. It could be anything from a cash-on-the-table offer to a deferred earn-out … or even a combination of deal types.
The best types of deal
Dealmaking is all about uncovering problems which would otherwise prevent a deal being made … and then finding the structure to solve them.
It would be naïve to think a deal is going to go through both quickly and smoothly (although it can happen).
In the vast majority of cases, though, no matter what problems crop up, it’s always possible to find a solution. That’s as long as both parties really do want the deal to complete.
The range of deal options
The type of deal usually depends on the type of business for sale, and the common actions within its business sector. For example, if an earn-out is common practice within that sector, then it’s very likely an earn-out will be the appropriate type of deal.
That’s not a hard-and-fast rule, though: deal types can range from cash-on-the-table to a merger where cash isn’t part of the deal. Or where cash is part of the deal while the rest of the offer comprises shares. Or where the deal excludes cash but includes shares.
Other deals can include outright sales to sales which are deferred for a given period of time.
And still other deals could be linked to current turnover or profitability or future predictions of either – or both.
WhiteEdge can look at your business – whatever it may be – and help you decide on the most suitable type of deal for you.