Exit playbooks rather than just exit clauses | KPMG | SG

Exit playbooks rather than just exit clauses

Exit playbooks rather than just exit clauses

With the average life of a joint venture being only seven years, it is important to have exit arrangements in place and an exit playbook for when things don’t go to plan. In this issue, we look at what an exit playbook is and what can it do for you.

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It is common to have exit clauses in partnership agreements, such as in joint ventures, distribution agreements, alliances and consortiums. As the name suggests, these clauses come into effect when one partner decides to exit the partnership, or all the partners decide to mutually dissolve the arrangement. An exit can be linked to events such as, the achievement of the joint objective, failure to perform, or changes in the business environment, such as a takeover or changes to the market conditions. They commonly overlap or are closely related to termination clauses. 

What is less common, however, is the existence of an exit playbook -- a document that is typically held by each partner separately and privately, and which identifies the tasks, responsibilities and information needed at/near exit to protect value and minimise disruption.

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