News & Analysis as of

Purchase Price Adjustment

Hanson Bridgett

Protecting Your Bottom Line: Adjusting Supply Chain Contracts to Mitigate Tariff Impacts

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Recent shifts in international tariff policies have created significant uncertainty for US importers. As a buyer, revisiting your supply contracts now can help safeguard your business from unexpected costs and disruptions. ...more

Mintz

Seller Considerations When Negotiating a Letter of Intent

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Negotiating and signing a Letter of Intent (LOI) is a key inflection point in the process of selling your business. Buyers and sellers both want the LOI to ensure a base level of understanding on certain key terms such as...more

WilmerHale

2025 M&A Report

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This year’s M&A Report offers a detailed review of the M&A market and outlook, including a breakdown by various geographies and industry sectors. We examine what might be in store with antitrust and CFIUS under the Trump...more

WilmerHale

Purchase Price Adjustments in Financial Services M&A Transactions

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In most M&A deals involving private targets (including the sales of divisions of publicly traded companies), the purchase agreement will include a baseline dollar value for the target, with several adjustments. Often, the...more

DarrowEverett LLP

Balancing the Scales: Purchase Price Adjustments in M&A Transactions

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In the complex world of business transactions, particularly mergers and acquisitions (M&A), purchase price adjustments are a critical concept that help ensure fairness and accuracy in the final transaction price. Purchase...more

Shutts & Bowen LLP

Construction Contractors Should Prepare for the Effects of Potential New Tariffs on Construction Material Prices and Availability

Shutts & Bowen LLP on

President-elect Donald Trump recently stated on November 25, 2024, his intention to impose tariffs of 25% on all goods coming from Mexico and Canada on his first day in office unless those countries do more to stop the flow...more

Mayer Brown

A Delaware Law Alert: M&A Disputes

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Two recent Delaware Superior Court opinions are essential reading for M&A practitioners drafting language with respect to how disputes related to purchase price adjustments, earnouts, and other accounting-related...more

Balch & Bingham LLP

2024 M&A Outlook: How Changing Deal Terms Reflect a Shifting Market

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The M&A landscape is beginning to evolve, with shifts in market dynamics shaping deal terms and bargaining dynamics for 2024 and beyond....more

Jenner & Block

Drafting Oversight Costs Seller $109 Million: The Save Mart Case

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On February 28, 2024, the Delaware Court of Chancery “reluctantly” confirmed an arbitrator’s award, leaving many in the private equity community surprised. This decision led to MP Seller Holdings LLC (Seller), seller of a $40...more

Goodwin

Adjustment Escrows in M&A: Why the 1% Rule Doesn’t Always Apply

Goodwin on

What is the typical size of an adjustment escrow? A common rule of thumb is 1% of overall deal value, but the size varies depending on deal value and the underlying characteristics of the business (including the net working...more

Whiteford

Net Working Capital & Purchase Price Adjustments In M&A Deals

Whiteford on

Net Working Capital (“NWC”) targets and purchase price adjustments are a nearly universal reality in private M&A deals, though often a neglected and misunderstood topic. To greatly simplify, the NWC target is the minimum...more

Goulston & Storrs PC

Key Takeaways: 2023 ABA Private Target Mergers & Acquisitions Deal Points Study

Goulston & Storrs PC on

The Private Target Mergers & Acquisitions Deal Points Study (“the Study”) is published on a bi-annual basis by the Market Trends Subcommittee of the ABA Business Law Section’s M&A Committee, which I am happy to serve on. The...more

Troutman Pepper Locke

Say What You Mean and Mean What You Say: Chancery Court Confirms Arbitration Award Requiring Seller to Pay Buyer $87 Million for...

Troutman Pepper Locke on

In a recent order, the Delaware Court of Chancery “reluctantly” confirmed an arbitrator’s award arising from a post-closing purchase price adjustment dispute between a seller of a chain of grocery stores and a private equity...more

Goulston & Storrs PC

What's Market: Separate Escrows for Purchase Price Adjustments

Goulston & Storrs PC on

In mergers and acquisitions (M&A) transactions, the definitive purchase agreement, whether asset purchase agreement, stock purchase agreement, or merger agreement, typically contains provisions for post-closing purchase price...more

Goodwin

Notable Differences Between US and UK M&A Deal Terms

Goodwin on

Despite a recent slowdown in global M&A activity, the private M&A market in both the US and the UK remains intensely competitive due to an abundance of available capital. As a consequence, and in order to present potential...more

Dorsey & Whitney LLP

The Locked Box - Unlocked

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By now, probably everyone that works in M&A or private equity has heard of the concept of a locked box as an alternative to completion accounts (or, in the U.S., “closing accounts”) on a deal....more

Goulston & Storrs PC

Separate Escrows for Purchase Price Adjustments (UPDATED)

Goulston & Storrs PC on

Market Trends: What You Need to Know - As shown in the American Bar Association's Private Target Mergers and Acquisitions Deal Point Studies: The use of separate escrows for purchase price adjustments has been...more

Cooley LLP

Locking the Box in Private M&A Transactions – Myths and Facts

Cooley LLP on

Purchase price adjustment mechanisms are common in private M&A transactions to determine the final price to be paid by the buyer. However, the manner in which the price adjustment is achieved varies by jurisdiction. In the...more

Goulston & Storrs PC

Purchase Price Adjustments (UPDATED)

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Market Trends: What You Need to Know - Based on the American Bar Association's Private Target Mergers and Acquisitions Deal Points Studies: - Purchase price adjustments continue to be commonplace in M&A agreements. In...more

Foley & Lardner LLP

Accounting in M&A Deals – Navigating the Numbers

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A key to success for any growth company is navigating the numbers, with success and visibility in accounting and finance, preferably up and to the right. Nowadays, companies are experiencing accounting challenges as they...more

McGuireWoods LLP

Tech Investing Part II: Purchase Price Adjustments

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Buyers, sellers, their counsel and other advisers sometimes give short shrift to post-closing adjustment provisions in M&A deals; however, it’s important to make sure that language and calculation methods are clear and don’t...more

Hogan Lovells

LDC Parent v. Essential Utilities: DE court on who should resolve purchase price adjustment dispute

Hogan Lovells on

In LDC Parent, LLC v. Essential Utilities, Inc. (C.A. No. N20C-08-127-MMJ-CCLD (Del. Super. Apr. 28, 2021)), the Delaware Superior Court held that a post-closing purchase price adjustment dispute had to be resolved by an...more

Lowndes

Critical Elements of Tenant Estoppel Letters

Lowndes on

If you are an investor buying a leased property, you are undoubtedly looking to the rental income as the return on your investment, in addition to the appreciation in the value of the property that is likely to occur over...more

Goulston & Storrs PC

Separate Escrows for Purchase Price Adjustments

Goulston & Storrs PC on

Market Trends: What You Need to Know As shown in the American Bar Association's Private Target Mergers and Acquisitions Deal Point Studies: - The use of separate escrows for purchase price adjustments has been increasing on...more

Goodwin

Rhode Island Federal Court Dismisses Securities Class Action Against CVS Arising From Statements Made After Omnicare Acquisition

Goodwin on

Rhode Island Federal Court Dismisses Securities Class Action Against CVS Arising From Statements Made After Omnicare Acquisition; SEC Division of Corporation Finance Suggests Companies Issue Additional Disclosures When...more

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