Reverse Termination Fee

A reverse termination fee is paid by the buyer if they back out of an acquisition, offering protection to the seller. This fee compensates the seller for the time and resources invested in a deal that ultimately doesn't close. Reverse termination fees are particularly important in transactions where the seller has significant exposure or has invested heavily in the deal process.

• Fee paid by the buyer if they back out of a deal.
• Protects sellers in M&A transactions.
• Compensates for time and resources spent.
• Ensures buyer commitment in VC and PE deals.