Equity Rollover Benefits

An equity rollover occurs when a business owner sells their company but chooses to reinvest, or “roll over,” a portion of the proceeds into the newly acquired business. An equity rollover allows a shareholder to benefit from any future growth and value creation. In a bolt-on acquisition or consolidation, the owner would likely receive equity in a larger, more diverse and less risky business enterprise. 

The benefits of an equity rollover for the shareholder include: 

  1. Continued participation in the company’s growth and potential upside. 
  2. Opportunity to partner with experienced investors or strategic buyers who can help scale the business.
  3. Potential referral of capital gains taxes that would otherwise be due upon a full cash-out.

For the new owners or investors, an equity rollover helps to: 

  1. Retain and incentivize valuable expertise and knowledge within the company.
  2. Align the interests of key stakeholders.
  3. Reduce the upfront cash requirements for the transaction. 

Learn more about the advantages and risks of an equity rollover in these articles on our website:

What is a Recapitalization Exit Strategy

Recapitalization Pros and Cons

What is an equity rollover when selling your business


For further information on this subject or to discuss a potential business sale, merger or acquisition need, confidentially, contact Al Statz at 707-781-8580 or alstatz@exitstrategiesgroup.com.