Earnouts: Bridging the Value Gap

2020-06-12T16:17:13+00:00June 12th, 2020|Post-Transaction, Transaction Mechanics|

When a business owner wants to sell a business, an often contentious negotiation point arises over the company’s valuation. As you might expect, it is fairly common that a buyer wants to acquire a business (or its assets) for less than what the seller is willing to accept. To bridge the difference, which has come [...]

M&A Tax Strategy: Purchase Price Allocation

2019-06-05T13:06:15+00:00January 31st, 2019|Strategy, Taxes, Transaction Mechanics|

Purchase Price Allocation M&A transactions trigger a variety of financial and tax implications for both the buyer and seller. One such implication, and the topic of this article, is the requirement to conduct a purchase price allocation. A purchase price allocation (or “PPA”), generally defined, is an allocation of a transaction’s purchase price to the [...]

Working Capital Purchase Price Adjustment

2019-01-03T21:22:52+00:00December 1st, 2018|Diligence, Transaction Mechanics|

What is a Post-Closing Purchase Price Adjustment? Post-closing purchase price adjustments are common provisions in middle market M&A transactions. Most purchase price adjustments act as a mechanism to address the potential shifts in “value” between the date a definitive agreement is signed and the date it closes, and ownership is officially transferred. Unfortunately, these two [...]