M&A Activity -- Expect a Surge in Mergers

The royalty rate and the term depend on the buyer's analysis of the profitability of the seller's revenues when produced either under the new management or in the buyer's plant, if the seller's plant is to be closed.

Once selling shareholders have agreed to a reasonable price, they should consider other possible transaction terms. These should deal with structure: Do you want the consideration paid in cash or the stock of a publicly traded company? Are you willing to accept some or all of the consideration in the form of secured seller financing (you receive payments secured by a promissory note that is secured by your company assets)?