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Buyout firms increase use of 'reverse break fees' to secure deals

Private equity firms last year increasingly pledged to pay break fees if they backed out of an acquisition, suggesting a need to assure concerned sellers that they would complete a deal during volatile markets

Private equity firms last year increasingly pledged to pay break fees if they backed out of an acquisition, suggesting a need by buyout firms to assure concerned sellers that they would complete a deal during volatile markets.

Traditional break fees are usually paid by vendors to cover due diligence costs should the seller pull out of a pending deal.

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