M&A Considerations Every Buyer and Seller Must Know – Part Two

Part two of a deep dive into M&A deal mechanics, covering indemnification, joint and several liability, closing conditions, HSR filing requirements, and non-compete agreements — the contractual terrain where transactions are won or lost.

Show Notes

Knowing the purchase price is only the beginning. The provisions buried in the contractual terms that follow a headline number are where most of the real risk — and real negotiating leverage — lives in any M&A transaction. This episode of the InvestmentBank.com podcast continues a focused breakdown of critical deal considerations, picking up at number six and working through to the end. The discussion is drawn from the M&A Considerations Every Buyer and Seller Must Know – Part Two article published by the InvestmentBank.com team.

The episode walks buyers and sellers through five areas of M&A transactions that consistently generate friction, delay, and cost — particularly for parties who arrive at the negotiating table without a firm grasp of the mechanics involved:

• Target indemnification: How caps, floors, time limits, and fraud carve-outs shape what either side can actually recover when something goes wrong post-closing.
• Joint and several liability: When multiple sellers are involved, whether each is on the hook for the full indemnification amount or only their proportional share is a negotiation that can spill into costly litigation if not resolved early.
• Closing conditions: Board approval, material adverse change confirmations, absence of litigation, legal opinions, and — critically — stockholder approval thresholds, which sellers must set strategically to avoid either a failed vote or an easy buyer exit.
• HSR filing and regulatory timing: Deals that cross certain size thresholds require mandatory filings with federal regulators and a waiting period that can typically run thirty days; identifying this requirement late is a common and avoidable mistake.
• Non-competes and non-solicitation agreements: Protections that prevent sellers from leveraging their insider knowledge of customers, processes, and talent to compete against the business they just sold, usually for three to five years post-close.

The throughline across all five considerations is that preparation is leverage. Whether you are evaluating a buy-side acquisition or planning a sale, understanding these terms before negotiations begin dramatically reduces the time and cost of reaching a close. For a broader look at how the full deal process works, listeners can also explore the prior episode in this series: 5 M&A Deal Considerations Every Buyer and Seller Must Understand.

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Middle-market investment banking explained by process rather than mystique. Positioning a business for sale, running a competitive process, valuation and deal structure, mapping a buyer universe, and the specific places transactions die.

Each episode takes one stage and walks through what actually happens and why — the diligence question that reprices a deal, the earnout that satisfies nobody, the buyer who was never real. Written for owners approaching a transaction and the advisors guiding them. Five or six minutes an episode, no jargon for its own sake.

Topics include preparing a business for sale, running a competitive process, valuation and comparables, deal structure and consideration mix, buyer universe mapping, quality of earnings, and the specific places transactions die.

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