Are you looking for the most recent study? The 2025 M&A Deal Terms Study offers updated trends and private-target M&A deal terms insights.
The 2023 SRS Acquiom M&A Deal Terms Study presents an analysis of more than 2,100 private-target M&A industry acquisitions valued at more than $460 billion that closed between 2017 and 2022 including more than 400 deals that closed in 2022 where SRS Acquiom provided services. The vast majority of these M&A deals are not required to be publicly reported.
M&A industry topics in this year’s study include:
- Latest impacts from shifting deal trends, historic interest rate increases, inflation, and other market challenges
- Comparisons of deals based on industries and whether buy-side Representations and Warranties Insurance (RWI) is included
- New data points and analysis on deal structures, representations and warranties, and indemnification terms
Key findings in this year’s study include:
- Nearly every M&A deal has a PPA, 73% of which have a separate PPA escrow
- Earnouts are showing longer performance periods (24 mos.)
- Median escrow sizes are holding steady at 10% across all deals
Listen to our experts discuss key highlights from the study in our videos below:
Deal Terms Insights: Fewer No Survival Deals Are Using Reps & Warranties Insurance (RWI)
Michelle Kirkpatrick
Executive Director, Shareholder Advisory
The 2023 SRS Acquiom Deal Terms Study shows fewer no survival or walk away deals that don't use rep and warranty insurance. But even on walk away deals or deals with rep and warranty Insurance, the sellers can still be on the hook for quite a few things post-closing. In fact, some of our most significant post-closing challenges have been on deals just like this.
One third of deals are now using special escrows for things like Tax Matters or even employee misclassification. Special escrows can be a great way for buyers to schedule their releases around their anticipated liabilities while also ensuring sellers receive most of their deal consideration within a reasonable time.
Deal Terms Insights: Holding Steady in Most Deals — Use of Special Escrows
Kip Wallen
Senior Director, Thought Leadership
The 2023 SRS Acquiom Deal Terms Study shows that most deal parties continue to utilize indemnification escrows.
In fact 93% of deals that closed in 2022 included at least one escrow or hold back and over half had two or more.
We often get asked about escrow trends including sizes, and what the data shows is that when you aggregate escrow amounts on private m&a deals, the median is holding steady at 10% of transaction value, and even deals that use reps and warranties insurance that median figure is two and a half percent of the transaction value, which could be five times the amount that deal parties might expect.
Deal Terms Insights: Customized Accounting Approaches for PPAs — An Emerging Trend
Karyn Kesselring
Associate Director
In our 2023 SRS Acquiom Deal Terms Study we found that purchase price adjustments are nearly universal on deals. In fact, 94% of transactions included these PPAs which are also sometimes referred to as working capital adjustments.
Not only are parties training more towards using these PPAs as a separate mechanism, but also in customizing the terms of the PPA to be more suited for the deal at hand.
The parties may want to consider developing a calculation worksheet which lays out a custom accounting approach for use in the adjustments, and this is just one of the many new points that we're tracking.
Kip is a senior director leading the SRS Acquiom thought leadership practice, the mission of which is to share resourceful content built from SRS Acquiom expertise and proprietary data. In addition to facilitating scores of interactive presentations at M&A conferences and law firms, Kip authors a plethora of articles and data studies regularly utilized by the market.
Previously, Kip was a part of the SRS Acquiom Transactional Group, where he collaborated with clients and counsel to negotiate M&A documents including purchase, escrow, payments, and other transactional agreements. Before joining SRS Acquiom, he was an attorney with a Denver-based boutique business law firm working on middle-market M&A deals.
Kip holds J.D. and M.S. (Econometrics) degrees and is a member of the Colorado bar.