How the Deferred Payment Trap Sinks M&A Sellers

The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators · Jun 25, 2026 · 9m · transcript

In mergers and acquisitions, a deferred payment structure can look like a win-win: the buyer conserves cash, and the seller gets a higher headline price. But Lucas and Luna unpack why that promise often turns into a trap — especially for middle-market sellers who lack leverage to enforce payment. Using the cautionary tale of a $40 million industrial services deal where the seller received only $12 million upfront and a $28 million note that ultimately defaulted, they walk through the three structural dangers: subordination to senior debt, weak covenant protections, and the absence of…