Conditions precedent is a term used to define all the significant points that need to be dealt with prior to closing a transaction. They are itemized in the letter of intent (LOI) by either the buyer or the seller, although it is usually the buyer who typically inserts them. The more typical conditions precedent include: Meet with significant...
The Lehman Scale is an industry accepted formula used by investment banks, M&A advisory firms, and business brokers to calculate the success fees on a sell-side (or sometimes buy-side) engagement.
The Lehman Scale is calculated based on a percentage of enterprise value as follows:
5% of the first $1,000,000, plus
4% of the second $1,000,000, plus,
3% of the third $1,000,000, plus,
2% of the fourth $1,000,000, plus,
1% of the remaining total.
The double Lehman is another variation of the above fee structure where the percentage increments go from 10%, 8%, 6%, 4% to 2%. Most investment banking engagements would also include a non-refundable work fee and a minimum level fee should a transaction close regardless of the transaction size. The size of the deal dictates how negotiable these percentages are.
Read More »
Don't miss out, get our best articles delivered to your inbox.
Terms for Selling Your Business:
Home | Advertising Info | Write for Us | About | Contact Us
Partner Sites :