Rollover equity
Take cash today and keep a stake in what comes next.
Many private equity buyers ask founders to roll part of their proceeds into the new company. Done well, it is a second payday. We run the negotiation of the terms that decide it, alongside your lawyers and tax advisers.
Rollover terms
Negotiating
The terms of the stake matter as much as its size.
Why it matters
When you roll equity, you become a minority shareholder in a company controlled by the buyer. The value of that stake depends on what class of shares you hold, what rights come with it and what happens if you leave. These terms are set before close, when you still have leverage.
The second bite
Timing varies by sponsor and plan, but most rollovers follow the same path from first offer to the next sale.
Talk through your offerOffer stage
The buyer proposes how much of your proceeds to roll and into which entity. This is the moment to compare it with what other bidders offer.
OutputRollover proposal compared
Before signing
Share class, governance, transfer rights and leaver terms are agreed in the shareholders agreement, alongside the main sale documents.
OutputAgreed shareholder terms
Hold period
The sponsor executes its plan, often including add-on acquisitions. Your stake rises or falls with the value of the whole group.
OutputStake tracks group value
Sponsor exit
When the sponsor sells, your rolled shares are sold too, usually on the same terms through tag-along and drag-along rights.
OutputSecond payout
Minority protections
A minority stake is only as good as the rights attached to it. These are the ones we focus on.
Share class
Rolling into the same class, at the same price per share, means you share in returns in the same way. Different classes or preferences can change your outcome a lot.
Exit rights
Tag-along lets you sell on the same terms when the sponsor sells. Drag-along lets the majority require you to sell. Both should treat you equally.
Governance
A board seat or observer role, plus regular financial information, means you can see how the business, and your stake, is doing.
Leaver terms
Good leaver and bad leaver clauses decide what you are paid for your shares if you leave. They are among the most important and most negotiated terms.
Terms compared
The same amount rolled can deliver very different results depending on the terms.
Weak terms
Strong terms
Weak termsBehind sponsor preferences
Strong termsSame class as the sponsor
Weak termsNo guaranteed tag-along
Strong termsTag-along on equal terms
Weak termsAnnual accounts only
Strong termsRegular reporting and board access
Weak termsBroad bad leaver clauses
Strong termsNarrow, clearly defined terms
Tax and structure
Rollovers can often be structured so tax on the rolled part is deferred, but this depends on your country and the deal structure. Your tax advisers confirm it before anything is signed.
| Question | Why it matters |
|---|---|
| Can tax on the rolled portion be deferred? | It decides how much cash you need now to cover tax. |
| Which entity do the rolled shares sit in? | It affects tax treatment and your rights. |
| How are loan notes and shares split? | Different instruments are taxed and paid out differently. |
| What happens on a partial or later sale? | Tax may fall due at different points. |
Acquiry does not give tax or legal advice. We coordinate with your licensed tax advisers and lawyers, who confirm the structure.
Leverage before close
Once the deal closes, the shareholder terms are fixed. Running a competitive process means rollover terms are compared across bidders, not accepted from one.
Every Acquiry mandate runs under strict NDA.
Questions
It is the part of your sale proceeds that you reinvest into the buyer’s new holding company instead of taking as cash. You keep a minority stake and share in the value when the buyer later sells.
It varies by buyer and deal. It is usually a minority of the proceeds, so most of the value is still paid in cash at close. Comparing proposals from several bidders shows what is reasonable for your situation.
In many countries the rolled part can be structured to defer tax until the later sale, but it depends on the jurisdiction and the deal. Your tax advisers confirm this before signing.
Sometimes. Some buyers require a rollover to keep founders aligned. Others accept a full cash exit at a different price. A competitive process shows you which options are on the table.
No. We introduce buyers and run the process and negotiation. Legal and tax advice comes from your licensed lawyers and tax advisers, who we work alongside.
Discuss a rollover offer
Share a few details and we will reply directly, usually the same working day. You do not need to share documents yet.