Christopher Riegg: Structuring M&A Transactions for Successful Outcomes

Christopher Riegg is an investment banking professional with more than three decades of experience advising business owners and executives on mergers and acquisitions, corporate finance, and strategic growth initiatives. A certified public accountant and chartered financial analyst, Christopher Riegg earned his bachelor of business administration from the University of Wisconsin-Milwaukee and his master of business administration from Marquette University. As a partner and co-founder of Promontory Point Capital, he has worked with more than 200 companies across industries including manufacturing, distribution, technology, and services. His areas of expertise include succession planning, recapitalization, private equity capital, and ownership transitions for family-owned and privately held businesses. He is also an active member of the Association for Corporate Growth.

Structuring M&A Transactions for Successful Outcomes

In mergers and acquisitions, the headline valuation often attracts the most attention, but experienced advisors know that structure, not price alone, determines the outcome. Two deals with identical valuations can produce very different results depending on how and when the consideration is paid. Modern M&A transactions are typically constructed using a mix of cash at close, earnouts, rollover equity, and seller financing, each of which shifts risk, timing, and incentives between buyer and seller.

Cash at close remains the simplest and most certain component of any deal. It provides immediate liquidity to the seller and eliminates exposure to the future performance of the business under new ownership. For that reason, sellers generally prefer higher cash components, while buyers must ensure they have sufficient capital or financing to support such offers. Cash-heavy deals tend to be more competitive because they offer certainty, but they can also limit a buyer’s flexibility and increase upfront risk.

Earnouts are commonly introduced when there is a gap between what a seller believes the business is worth and what a buyer is willing to pay upfront. Under an earnout structure, a portion of the purchase price is contingent on the company achieving specific performance targets after closing, such as revenue or EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) milestones. This allows buyers to reduce risk while allowing sellers to realize additional value if projections are met. However, earnouts introduce uncertainty and can lead to disputes if performance metrics are not clearly defined or if post-sale decisions affect outcomes.

Rollover equity represents another important tool, particularly in private equity-backed transactions. Instead of receiving full payment in cash, the seller reinvests a portion of the proceeds into the newly structured company and retains an ownership stake. This aligns incentives by giving the seller a continued interest in the company’s success and a potential second payout upon a future exit. At the same time, rollover equity exposes the seller to ongoing business risk and limits immediate liquidity, making it essential to evaluate governance rights and exit timelines carefully.

Seller financing, often structured as a seller note, is used when a buyer cannot fund the entire purchase price upfront. In this arrangement, the seller effectively lends part of the purchase price to the buyer, to be repaid over time with interest. This can help bridge financing gaps and signal confidence in the business’s future performance. However, it also places the seller in a creditor position, exposing them to the risk that the buyer may underperform or default.

These structural elements are not independent. They are combined to balance competing priorities and address information gaps between parties. Buyers use structure to mitigate uncertainty and preserve capital, while sellers use it to maximize total value and protect downside risk. Tools such as earnouts and rollover equity are particularly effective in bridging valuation gaps, allowing deals to proceed when expectations differ.

Successful M&A outcomes depend on aligning incentives as much as agreeing on price. A well-structured deal ensures that both parties share in the risks and rewards of future performance, reducing the likelihood of conflict and increasing the probability that the transaction delivers on its strategic intent. For business owners and executives, understanding these mechanics is essential to evaluating offers and negotiating terms that reflect not just what a business is worth, but how that value is actually realized.

About Christopher Riegg

Christopher Riegg is a partner and co-founder of Promontory Point Capital with extensive experience in mergers and acquisitions, corporate lending, recapitalization, and private equity transactions. Over the course of his financial services career, he has advised more than 200 business owners and executives on growth strategies, financing options, and ownership transitions. He holds both CPA and CFA designations and remains an active member of the Association for Corporate Growth.