5 Tips For Sellers When Entering Into An M&A Shareholders' Agreement

You are a private company seller looking to exit your business after years of building up value. Your sale process is going well, and you have identified a preferred buyer that wants to pay a premium for your company. The only issue is that the buyer doesn't want to buy 100% of the company. Instead, the buyer wants you to remain invested and "roll over" some of your equity at closing into a minority ownership position and enter into a shareholders' agreement governing the target company after closing. You have never been a minority investor before, nor have you ever entered into a shareholders' agreement. What should you do?

Potential Advantages of a Partial Exit

It is not uncommon for buyers in private company sale transactions (especially private equity funds) to want or require a seller to remain invested in the target business after closing.