M&A, Source-to-Pay Technology Vendors and the Importance of Change of Control Clauses in 2016 [PRO]

change of control clauses Kzenon/Adobe Stock

I wanted to pen a quick post to our PRO members about the importance of change of control clauses in contracts. I’m writing this because there are a number of source-to-pay vendors (both suite and non-suite) currently being shopped on the market, and I think practitioners are generally unaware of their exposure in cloud/SaaS transactions if they have not negotiated change of control clauses in their contracts. On some levels, this is moot. If a typical private equity firm — as opposed to a bottom feeder one attempting to flip a firm or simply enforce patents — acquires a vendor, I would view it as a net positive from a practitioner perspective. But when another tech firm acquires a vendor whose software you’re using, it’s another story. This Spend Matters PRO analysis explores different types of vendor transactions (which may be in your favor as a customer versus not from a change of control perspective) and provides three actionable steps on how to negotiate these clauses and more.

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