Sale and purchase agreements
Change the economics of your transaction
The headline deal value of a transaction can fluctuate significantly as a result of the financial, accounting and tax aspects of the sale and purchase agreement.
Our M&A Transactions group advises mergers and acquisitions (M&A) clients on the cash accounting and tax implications of the transaction agreement being negotiated. This includes the purchase price adjustment mechanism, the structure of completion accounts, and the accounting policies adopted in the preparation. In addition, our M&A tax team provides structuring advice and reviews transaction documents from a tax perspective to adequately protect the clients against any adverse consequences.
Drawing on our substantial experience in transaction disputes, and working closely with your legal advisors, we can assist you in developing contractual solutions to accounting or commercial issues identified by the core Deloitte team.
This unique service offering gives our clients a significant advantage in the M&A process and could change the entire economics of your transaction.
We assist our clients in achieving a clean exit at a predictable price (sell side) or to set out the purchase price mechanism and have remedies in place if the business’ financial position is not as expected (buy side). Our Sale and Purchase Agreement (SPA) team can help you if you are:
- Considering an acquisition or disposal
- Submitting an offer letter or agreeing a memorandum of understanding
- Reviewing a draft Sale and Purchase Agreement
- Drafting or reviewing completion accounts.
As part of our SPA review, we would be responsible for:
- Proposing or reviewing a purchase price adjustment mechanism
- Dealing with a “locked box”
- Considering the impact of “cash and debt free”, “target net assets” or “earnouts”
- Providing advice in setting the level for target working capital
- Considering the financial definitions for inclusion in a transaction contract
- Reviewing or drafting accounting policies and hierarchies or procedures.
Through our involvement in the transaction and our role as the due diligence provider, we are very close to the numbers and financial dynamics of the business early in the process. We are therefore ideally placed to identify critical commercial issues at a time when they can be converted into real value.
For further information about our SPA capabilities, please contact a member of our Transaction services team in your location.