Unique deal structure to brace for macroeconomic headwinds

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November 02, 2022

by a searcher in Cincinnati, OH, USA

As interest rates rise creating macroeconomic headwinds, what type of deal structure is everyone seeing/using for companies that could be impacted (but not destroyed) by a recession? Are you seeing more or larger % of earnouts / forgivable seller notes? Curious if anyone has witnessed any unique deal structures? Looking for ways to bridge the gap for solid companies expecting some type of recessionary impact, but owned by sellers who still need to sell due to life events (ie: retirement.)

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Reply by a searcher
in Austin, TX, USA
Great question. I am looking at a deal at the very moment where exactly this is happening: great company, but last three months earnings substantially down by 2/3s. Seller is anchoring expectations on the past whereas I am looking at the future and DSCRs. Hard to bridge that gap.
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Reply by a searcher
from Stanford University in Cidade de Ho Chi Minh, Ho Chi Minh, Vietnã
Good question, commenting to follow the thread
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