In the last few years, private equity firms have become increasingly important players in middle market mergers and acquisitions. Fueled by a flood of equity capital, a relatively unattractive public market and an accommodating lending environment, private equity firms are paying competitive prices for businesses and, in some cases, beating out strategic buyers.

Through the first quarter of 2007 the deal environment has maintained the fast pace of 2006. According to Dealogic, although overall US deal volume slipped a bit in the first quarter (dropping 11% over deal totals from the fourth quarter of 2006) US merger activity grew 21% from the same period last year. Volume reached $428.7 billion on mega deals, compared with...

Few experiences in business are more harrowing than having a deal to sell your company fall apart. While the ups and downs of a deal are inevitable, having your transaction get permanently derailed is not. If the deal crashes and burns, the repercussions on your business can be significant and long lasting. Company performance may suffer as management takes its eye off of dayto- day operations. Key employees get spooked and leave because of the anticipated change of control. The window of opportunity for selling your business may narrow, if not close all together. All of these outcomes can contribute to lowering the company’s eventual sale price.

Activist shareholders have been making headlines in the deal world recently, with several deals being affected by valuation concerns at the board or shareholder level. The Topps Co. board is at odds over a $385 million buyout offer from Madison Dearborn Partners and Tornante Co., Michael Eisner’s private investment company. Directors associated with...

As M&A activity in the middle market sector increases, business owners are more and more likely to be presented with an opportunity to sell their company. Many different factors go into how a given company is valued. However, one element that many entrepreneurs may not be familiar with is deal structure. Deal structure is critical to understanding the most important financial aspect of any deal – net proceeds to the seller.