M&A Foundations · glossary
Accounts drawn up at the completion date, used to adjust the price for the cash, debt and working capital actually delivered. The buyer pays for what it really gets, but the accounting takes months and can end in disputes. It is the main alternative to a locked box. Chapter 9
Explained in Chapter 9, Price Mechanisms and Adjustments, of M&A Foundations.
…The other is completion accounts: a price corrected afterwards against a balance sheet drawn up at completion. The two approaches allocate risk quite differently, and switching from one to the other mid-deal reopens the price itself. Choosing the mechanism at heads stage removes the single biggest fight from the SPA negotiation; Chapter 9 covers both mechanisms in depth.Read Chapter 6, Term Sheets and Heads of Terms →
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