Transactions involving the disposition of partnership property or partnership interests can trigger rules that limit business interest expense deductions. Section 163(j) of the Internal Revenue Code generally...
Interested in knowing what other partners are saying about how commercial lease agreements are evolving? Access exclusive market intelligence about private commercial lease agreements, as only told by...
The seller usually wants assurances that a buyer will be able to fund an acquisition at the closing, particularly if the closing is subject to a lengthy interim period between signing and closing. If a...
A company that receives a warning letter from the Food and Drug Administration (FDA) is on FDA's radar screen. In addition to responding appropriately to any actual or potential violations indicated...
We just added Arbitration Q&A content to Practical Guidance’s State Law Comparison Tool! Compare state laws on arbitration both pre-dispute and once a dispute arises across five key arbitration...
Sometimes a seller makes a commitment to sell its business only to find that another party would have paid more for that business. Although fiduciary duties may play a role in a seller’s termination of a signed deal, buyers will try to include a breakup fee to give the buyer some degree of recovery for expenses, time, and opportunity costs if the seller ends up terminating the deal for a superior proposal or some other reason specified in the transaction agreement.
According to Market Standards, 97 transaction agreements were filed between September 1, 2022 and November 30, 2022 with a value of $100M or greater. Of those 97 deals, only 28 deals included termination fees. The average termination fee as a percentage of deal size ranged from 0.01% to 7%, with an overall average of 3% as a percentage of deal size. The average termination fee size as a percentage of deal size ranged from 2.4% for deals valued between $1B and $5B to 3.4% for the deals valued between $100M and $500M.
Market Standards is a powerful tool for researching and comparing over 38,000 M&A transactions from 2008 to the present. Leverage Market Standards to find on-point precedent language on the most highly-negotiated transactions with over 150+ M&A deal points. To learn more about how it can help M&A attorneys work more efficiently, click here.
Discover Emerging Trends in M&A Transactions
Learn more about drafting break-up fees in this termination fee clause.
Read now »
Related Content
Practical Guidance Updates Featuring the latest updates from your Practical Guidance account.
Experience results today with practical guidance, legal research, and data-driven insights—all in one place.Experience Lexis+