Equity Rollovers in M&A Transactions

Negotiating and Structuring Rollovers; Tax Considerations for Buyers and Sellers

Note: CPE credit is not offered on this program

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Wednesday, September 16, 2020

Recorded event now available

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Program Materials

This CLE webinar will guide deal counsel in structuring equity rollovers in M&A transactions, focusing on current market trends, governance provisions, stock rights, and tax considerations for both buyers and sellers.


The seller equity rollover is a favored vehicle for bridging the valuation gap in private equity mergers and acquisitions. The technique aligns management with the new company, and signals the seller's confidence in the acquired company to prospective buyers and financiers. Equity rollovers facilitate a smooth ownership transition.

Rollovers are typically structured as an exchange by the seller of part of its equity for common or preferred stock, resulting in a reduction in the cash purchase. Equity stakes generally are between 10 and 49 percent. The seller is usually offered certain governance rights and input regarding future operations of the business.

When properly structured, the rollover can be a tax-free transaction for the seller. However, an equity transaction may limit the buyer's ability to step up the tax basis of the acquired company's assets. Counsel must understand the tax treatment in these deals to achieve the desired tax outcomes for the parties.

Listen as our authoritative panel of practitioners guides you through seller equity rollovers in M&A deals. The panel will look at current trends in equity financing, rights and obligations of each party, and tax considerations for both buyers and sellers.



  1. Equity rollovers: current market trends
  2. Structuring rollover provisions: rights of the seller
    1. Preemptive rights
    2. Tag-along, drag-along rights
    3. Registration rights
    4. Voting rights
    5. Transfer restrictions
  3. Tax implications and deal structures to optimize tax outcomes


The panel will review these and other relevant issues:

  • How can equity rollovers be used to facilitate a smooth ownership and management transition in M&A deals?
  • What are the critical tax issues to understand and consider when using equity rollovers?
  • What stock rights must be negotiated between the buyer and seller in a rollover transaction?


Granek, Andrew
Andrew M. Granek

Osler Hoskin & Harcourt

Mr. Granek’s practice concentrates on a variety of U.S. federal income tax matters in connection with domestic...  |  Read More

Hardy, David
David R. Hardy

Osler Hoskin & Harcourt

Mr. Hardy’s practice focuses on corporate and international tax including the tax issues affecting corporations...  |  Read More

Wern, Theodore
Theodore W. (Ted) Wern

Perkins Coie

Mr. Wern represents public and private companies, private equity funds, family offices, and other investor groups....  |  Read More

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