Purchase Price Provisions in Acquisition Agreements

Summary

This practice note provides an overview of considerations for an M&A practitioner when drafting or negotiating purchase price provisions in an acquisition agreement. The purchase price provisions are among the most critical terms of an acquisition agreement. The value of the consideration to be paid by the buyer to the seller will be affected not only by provisions setting forth the amount of the consideration, but also by the form of consideration, the timing of payment, potential adjustments to the amount to be paid, and any rights of set-off that the buyer may assert against outstanding payments. Click here to see recent examples of publicly filed acquisition agreements containing earn-outs in Market Standards - M&A, the Practical Guidance database of publicly filed M&A deals that enables users to search, compare, and analyze transactions using 150+ M&A deal points to filter search results.