Private M&A (share sale and asset sale)—glossary of terms


Published by a UUÂãÁÄÖ±²¥ Corporate expert
Practice notes

Private M&A (share sale and asset sale)—glossary of terms


Published by a UUÂãÁÄÖ±²¥ Corporate expert

Practice notes
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Accounts date dealOn an accounts date deal for a share purchase, the buyer will determine the purchase price by reference to the previous set of audited accounts (and any other information available by means of due diligence) and there will be no mechanism for adjustment of the purchase price within the SPA (other than by means of warranty or covenant claims).
A simple accounts date structure is now infrequently used because it provides no protection (other than specific protections under the tax covenant) for the buyer for the activities of the target company (or its group) after the accounts date.
For further information, see Practice Note: Completion accounts, accounts date and locked box and tax under the heading ‘Accounts date’.
Anti-embarrassment clauseThese clauses typically provide that the seller will receive an additional payment for the shares/assets it sells to the buyer under the SPA/APA if the buyer resells such sale shares/assets (or an exit event such as a listing of the target company’s shares occurs) within a certain period of time after completion of the original sale. These clauses
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