Tag-Along
Private Credit glossary · Market, Sourcing & Sponsor Dynamics
Definition
Right of minority shareholders to sell alongside majority shareholders on the same terms.
Tag-Along in plain English
Imagine you own a small stake in a company alongside a big majority owner, and that big owner strikes a deal to sell their shares to a buyer at a great price. A tag-along right lets you 'tag along' and sell your shares in the same deal on the exact same terms, so you aren't left stranded owning a piece of a company now controlled by a stranger. It's a protection for the little guy: if the big fish gets to cash out on good terms, you can too. Without it, minority owners could be trapped while everyone else exits.
Practice Tag-Along
In a private equity exit, what does 'Tag-along' right provide to a minority shareholder?
Related Private Credit terms
Private Credit practice questions · Private Credit flashcards · Private Credit study guide