Structuring / Sales & Purchase Agreements
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A number of different considerations can influence the optimal structure for a deal requiring a balance between the objectives behind the deal and accounting, tax, regulatory and commercial considerations. Our dedicated structuring experts assist with marshalling the complex range of factors including tax, legal, accounting and regulatory issues that will need to be considered together and advise on designing the optimal deal structure and how to effect transactions.
In any transaction, the Sale and Purchase Agreement (SPA) represents the outcome of key commercial and pricing negotiations. Purchasers and Sellers are becoming increasingly sophisticated in seeking to exploit the potential value to be gained through the negotiation and execution of the SPA. Our dedicated SPA team provides expert support at all stages of a transaction from pre-deal work through to post-completion support.
If this is your situation
- You are considering acquiring or disposing a business and are looking for the optimal tax structure.
- You are making an acquisition and wish to ensure that potential 'debt-like' items and other financial risks have been identified and appropriately addressed, either by way of a reduction in consideration, through a completion pricing mechanism within the SPA, or through warranties and indemnities.
- The transaction being contemplated includes a post completion pricing mechanism. You are seeking to position the SPA to your advantage and to minimize the opposing party's potential to manipulate price.
- You are contemplating the disposal of a business and wish to consider the relative merits of 'locked box' and other completion mechanisms in the context of your transaction.
PwC can help you
- We help clients to identify the principal concerns that will determine the right structure for a transaction.
- We create a feasibility plan to assess the chosen structure and once this is confirmed as the right choice we will provide continuous support throughout implementation.
- We can work with you and your financial due diligence team to assist you in mitigating the risks identified during the due diligence phase.
- We can advise you in your negotiations of the accounting aspects of the SPA. Such advice would include commentary on the pricing mechanism, relevant representations and warranties, any other accounting related clauses of the SPA and any dispute resolution mechanisms related to the purchase price adjustment.
- We can advise you in your analysis of the working capital requirements of the Business with a view to you determining the normalized working capital for the purposes of your negotiation of the SPA.
- We can advise you in your determination of the appropriate financial benchmarks (or appropriate adjustments to price in the case of a 'locked box' (fixed price) mechanism) and related arguments, for the purposes of price negotiation and drafting the SPA.