Equity Rollovers: When the Financial Buyer Needs Invested Management

There are instances where a purchaser wants to entice a target company’s key stockholders to continue operating the target business after an acquisition. For example, a private equity investor is acquiring a new company to add to its investment portfolio. One way to sweeten the deal for a target company’s key stockholders is to offer an equity rollover. Or private equity sponsors motivated to retain current management will often make use of management equity rollovers in connection with private equity buyouts.    

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