M&A transactions typically involve costly and time-intensive processes, and for this reason parties often seek to limit completion risk by negotiating a termination fee. Indeed, the recent 2018 SRS Acquiom Deal Terms Study reveals that the use of termination fees in private M&A transactions doubled in 2017.
From 2012 to 2016, the use of termination fees remained relatively stable, with approximately 10% of private M&A deals including termination fees. In 2017, however, the use of termination fees increased dramatically, with 21% of private M&A deals reportedly incorporating termination fees.
Interestingly, the overall increase in the use of termination … Continue Reading