Apr 12, 2016
GF Data’s semi-annual view of trends in key deal terms other than price – indemnification cap, escrow/hold back and basket shows that the “seller’s market” conditions driving valuations continue to affect key deal terms as well.
- The average cap on indemnification of reps and warranties for 2015 was 14.9 percent of TEV in the year to date – continuing the general downward trend of the last five years.
- Average escrow/holdback in 2015 was 6.6 percent of TEV. This number has been remarkably stable, averaging between six and seven percent for the past five years.
- Indemnification caps on deals with earnouts versus deals without earnouts showed a pronounced drop 2015 versus 2014.
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