Secondary Purchase

In comparison to a trade sale, a secondary purchase is a sale of the company to another financial investor, who wants to generate a return himself through a certain holding period and a renewed exit. Usually an exit of all partners, including the founders, is not necessary. The agreed special provisions in the participation agreement, such as liquidation preferences, are generally not applicable here, unless the secondary purchase has been defined as an explicit event. Nevertheless, any pre-acquisition or co-sale rights of the other shareholders must be observed.