Finding a good deal is hard, but getting it closed the way you want it could be more complex. Now that the due diligence is done, you have a list of commercial and pricing considerations as well as various key risks highlighted in the due diligence reports. How will the sales and purchase agreement (SPA) safeguard your interests against all the risks identified?
You will most likely need answers to some of these questions:
Purchase price
- How does the purchase price mechanism work?
Which closing mechanism is suitable - locked box or completion accounts?
How do I define price adjustment items?
How do I ensure all the key risks identified are reflected in the SPA?
How can I be sure that my proposed adjustments won’t compromise the deal?
How do I ensure the relevant transaction taxes reflect the commercial position and do not result in unintended additional taxes?
Pre-closing safeguards
- How do I ensure the business is properly run between signing and handover?
What are the services that continue to be needed of vendors before handover?
Accounting implications
How will the SPA clauses affect my financials post transaction?
We have assisted various clients and their legal advisors with the questions above. We can:
Advise you in considering a suitable closing mechanism for your transaction and determining the relevant adjustments, definitions and safeguards to be included in the SPA to protect the business against value erosion
Advise you in your negotiations of the accounting aspects of the SPA, including commentary on the pricing mechanism, relevant representations and warranties, tax clauses and any dispute resolution mechanisms related to the purchase price adjustment
Advise you in your evaluation on the accounting implications of the mechanisms and safeguards implemented to your financial statements post transaction
An illustration of how we assisted a client to secure its deal value:
Contact us
Shu Kew Loke
Deals Partner, Transaction Services, and NextGen Club Lead, PwC Malaysia
Tel: +60 (12) 233 5804
