Optimal M&A deal-making requires knowing the latest market data and trends in deal terms, but the details of approximately 50% of private deals annually in the U.S. are undisclosed. We analyze the financial and legal terms of nearly 500 undisclosed, private-target M&A transactions from 2010 through 2013. The database is particularly germane to dealmakers involved in the middle M&A market. In addition to deals by serial public acquirers, the database includes deals by private, financial and foreign buyers. The terms of nearly all deals in the paper are proprietary, as SRS Acquiom is a party to the acquisitions when engaged as shareholder representative.

Some key findings:

Leaner capital: median equity capital invested fell to $23 million in 2013 from $28 million in 2012.

Cash vs. stock deals: though cash is still king, deals involving buyers’ stock rose to 21%, up from 15% in 2012.

Purchase price adjustments: over 80% of deals in 2013 included a post-closing purchase price true-up mechanism, usually based on working capital.

Management carveouts: 89% of deals in which transaction value didn’t exceed amounts invested had a management carveout.

Employee retention holdbacks: holdbacks contingent on employees’ continued employment with the buyer rose dramatically year-over-year, but overall remain uncommon—only 8% of deals in 2013 included a retention holdback.

Material Adverse Effect: use of “prospects” in the definition of Material Adverse Effect has declined by half since 2010, dwindling to one-in-ten deals in 2013.

Conflict waivers: waivers allowing the target’s counsel to represent the selling shareholders post-closing in matters related to the acquisition nearly doubled to 40% in 2013, from 22% in 2012.

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