Merging two businesses with an earn-in equity %

by a searcher

1 year ago

I am a self funded searcher that is currently looking at merging two businesses together. Business 1 is owned by Owner A. Business 2 is owned by the same Owner A (50%) and Owner B (50%). I am looking to buy in to the newly merged business which would dilute both of their equity, and slowly earn in more equity with performance hurdles over time. Does anyone have experience in structuring a deal like this? Any tips would be appreciated. I plan on using SBA financing for the buy-in portion.

2 likes
53 views
1 comment

intermediary from Indiana University at Bloomington

That probably won't fly using the SBA. If it does technically, the SBA has a 6 month lookback period on ownership and all owners then would have to guarantee 100% of your loan, which is unlikely for them to do.

1 year ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

Investor seeking Self-Funded Search Deals

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Downsides of "buying a job" below 750k+ EBITDA?

6-7x for a Self-funded Search Deal?

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.