M&A Foundations · glossary
The deal perimeter is the boundary of what is being sold: which companies, businesses, assets, contracts and people go to the buyer, and which stay with the seller. It is fixed early, because the price, the due diligence and the documents all depend on it. Anything shared with the seller's group needs a plan, such as a transitional services agreement.
The precise boundary of what is being bought: which companies, assets, contracts and people are inside the deal and which stay behind with the seller. Drawing the perimeter is a structuring exercise done before the SPA is drafted — get it wrong and you buy too much or too little. Chapter 4
Explained in Chapter 4, Structuring the Deal and the Group, of M&A Foundations.
Every chapter of M&A Foundations is free to read, including the full training share purchase agreement.
The scope of the deal. A clean perimeter is one company with everything it needs. A messy one needs assets moved first, for example by a hive-down into a new company, so the buyer gets exactly what it pays for.
The line around the business being sold. It decides what due diligence covers, what the warranties speak to, and what the seller must still provide after completion.
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