Completion accounts: acquisitions

by Practical Law Corporate

A practice note that provides guidance on structuring and drafting a completion accounts mechanism in the context of a share or asset purchase transaction. This note offers an overview of how the final purchase price in a corporate acquisition can be calculated post-completion on the basis of accounts drawn up to the completion date. It explores key considerations for drafting the acquisition agreement, including the format of the completion accounts, the basis of their preparation and the procedure for review and agreement. The note addresses common price adjustment metrics such as net assets, working capital and cash free/debt free adjustments. The note also outlines the process for resolving completion accounts disputes, including referral to an expert for determination.