Purchase price | United Kingdom | Global Private M&A Guide - Limited External Content

Purchase price

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Is a purchase price adjustment common?

Frequency/market practice: Very common.

What type of purchase price adjustment is common (e.g., debt-free, cash-free)?

Frequency/market practice: The normal mechanism is 'cash-free/debt-free (using completion accounts) with a normal level of working capital'. Locked box adjustments are also common.

Is there a collar on the purchase price adjustment?

Frequency/market practice: Rarely.

Who usually prepares the closing balance sheet (where applicable)?

Frequency/market practice: This is usually prepared by, or on behalf of, the buyer.

Is the balance sheet audited (where applicable)?

Frequency/market practice: Rarely; this is usually prepared by an audit firm (i.e., accountants) and checked by one too, but not formally 'audited' (because these are special-purpose, rather than statutory, accounts).

Is an earn-out common?

Frequency/market practice: Fairly common.

Is a deposit common?

Frequency/market practice: Rarely.

Is an escrow common?

Frequency/market practice: Fairly common

Is a break fee common?

Frequency/market practice: Rarely.

Global Private M&A Guide - Limited External Content

United Kingdom

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