The value at stake contained in the provisions and mechanics of a Sale and Purchase Agreement can be even greater than the headline price itself. Our SPA experts can help you navigate through the complexities and pitfalls to ensure you optimise outcomes, avoid value leakage and manage your risks appropriately.
Ahead of signing the SPA, we can help you assess critical exposures and advise on how to determine cash, debt like items and the normal level of working capital. We can set out the arguments and counter arguments to support the negotiation and optimise the price and SPA determination. Key elements typically include:
Ensuring that potential 'debt-like' items and other financial risks have been identified and appropriately addressed, either by way of a reduction in consideration, through a completion pricing mechanism within the SPA, or through warranties and indemnities
Assessing the working capital requirements of the Business with a view to setting the normalised working capital target for the purposes of the SPA
Working with you and your other advisers to assist you in mitigating the risks identified during the due diligence phase
Advising on the accounting aspects of the SPA, such as the pricing mechanism, relevant representations and warranties, any other accounting related clauses of the SPA
For vendors, our team can also provide support by:
Advising you on the relative merits of 'locked box' and other completion mechanisms in the context of your transaction
Limiting the opportunity for price erosion by potential acquirers, both through the determination of consideration to be paid and through any post completion mechanism
We can draw upon the experience of over 100 SPAs in the last 5 years as well as the forensics experience of SPA dispute resolution and the learnings they provide.
Post-deal, we can support the review of Completion Accounts and assist in with the negotiation of the final position. We can also act for you in disputes, should matters not come to an agreed resolution.