Any experience with self funded searches that involve majority purchase

by a searcher from Northwestern University - Kellogg School of Management

6 years ago

vs. 100% purchase of a company? I am contemplating a stock purchase with an owner who will remain a minority partner at 49% of the company. Will be diving into the LOI this week and would love to hear from anyone who has gone the stock purchase route or closed a deal with an owner who stayed on as a minority partner. 

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professional from William Mitchell College of Law

There shouldn’t be any barriers to doing this (separate from the SBA program issue that Jon mentioned which I’m not familiar with). You will want an operating agreement or shareholder agreement that contains drag aalong rights - the same kind of issues with your investors as well. I’ve done dozens of PE deals with sellers rolling over a minority and think its totally do-able in the search fund context. Feel free to reach out directly if you’d like to talk more

5 years ago | like reply | 1 like

searcher from Northwestern University - Kellogg School of Management

I am in the same exact boat. Would love to hear from searchers who took this path.

5 years ago | like reply | 0 likes

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