One of the common tools to mitigate transaction risk is a holdback escrow, where the buyer can retrieve funds in escrow if the seller fails to meet certain terms of the purchase agreement. There are numerous benefits to holdback escrows, such as broad claim coverage, publicly-available payout statistics to assist with cost estimation, and shared risk between buyer and seller.

For practitioners curious about how best to structure holdback escrows in their deals, J.P. Morgan’s 2018 M&A Holdback Escrow Study summarizes recent holdback escrow trends by analyzing 3.5 years of its M&A transactions containing these provisions:

  • Amount in escrow: The
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