Welcome back to the Dealmaking with Laura DiFrancesco podcast! In this episode, Laura dives into the mechanics and strategic value of put options within mergers and acquisitions. She explores how put options provide investors with liquidity and exit certainty while offering operators opportunities to regain control and simplify ownership structures. Drawing on her extensive experience, Laura breaks down the nuances of structuring and negotiating put options, including valuation methods, payment terms, and triggers, ensuring fairness for all parties. The episode highlights the growing relevance of put options in Entrepreneurship Through Acquisition (ETA) and underscores the importance of comprehensive exit planning in navigating the complexities of M&A.
What You’ll Learn
The Basics of Put Options
// Discover how put options work and their critical role in creating flexible exit strategies within M&A transactions.
Investor Perspectives in Deal Structuring
// Understand what drives investor decision-making, from liquidity needs to portfolio planning and risk management.
Valuation Techniques for Put Options
// Explore the methods used to calculate valuation in put option agreements, including fixed prices, formulas, and appraisals.
Entrepreneurship Through Acquisition (ETA)
// Discover how entrepreneurs can leverage put options as a tool for successful small business acquisitions.
Key Considerations in Deal Structuring
// Learn how to structure deals with fairness and clarity, ensuring long-term success for all parties involved.
Episode Highlights:
[00:00] Welcome to DWLD
[01:16] Introduction to Put Options in M&A
[03:43] Understanding the Mechanics of Put Options
[08:00] Typical Structure of Put Options
[10:16] Dean Street Law Ad
[11:18] Evaluation of Payment
[15:46] Investor Perspectives on Put Options
[16:43] Acquisition Insights Ad
[17:41] What is an Investor Thinking?
[21:53] Outro
Resources Mentioned
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Credits
Host // Laura DiFrancesco
Executive Producer // Teagan Rowland
Editor // Ariel Yu and Teagan Rowland
Associate Producer // Ariel Yu
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