Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The Earnest Money Trap in M&A Deals
Lucas and Luna break down the hidden mechanics of earnest money deposits in mergers and acquisitions—why buyers put 1–3% of a deal's value at risk before signing, how sellers use it to lock in serious bidders, and what happens when a deal falls apart over financing. Using the 2023 sale of a $450 million industrial parts distributor (acquired by a New York–based private equity firm before the Fed's final rate hike) as the central case, the hosts walk through the escrow timeline, the 'hell or high water' clause, and the little-known reverse-termination fee that can flip the…
The skinny
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