Financial Issues in Acquisition Agreements

The Financial Issues in Acquisition Agreements course helps participants get on the front foot with negotiations around financial issues in sale & purchase agreements.

It equips them for debates around working capital, the net asset position and completion accounts, positioning participants to generate more value for clients than they are costing them in fees!

Course Content:

Financial Issues in Acquisition Agreements - Overview – where is the money?

• What is debt free cash free?
• Why is it used?
• Reconciling debt free cash free to net proceeds
• What’s the opportunity here?
• What is debt?
• What might be include in our definition of debt e.g. if we were buying the business?

Group exercise: pretend you are advising the acquirer (or the vendor) of a business. Simply working from a standard balance sheet, what would you want to see included in the definition of debt? What is the effect on net proceeds? Yes there is a lot to argue about!

• Where is the money?
• Where else is the money?
  • Working capital requirements
  • The net asset adjustment
  • Completion accounts
  • Earn outs

Working capital – getting on the front foot from the start

• What is working capital?
• What kind of business could it be an issue for?
• What’s the likely impact on negotiation?
• What’s our strategy?
• How can we anticipate working capital issues?
• How can we avoid the price chip?

Sale & purchase issues – earning your fee from completion accounts

• Why do we have a target NAV?
• What’s the opportunity here?
• Fine tuning the price
• Policies that will trip you up
• Policies that will cost your client money

Group exercise – completion accounts policies: teams are supplied with sample completion accounts policies. How could these be played to your client’s advantage?

• Policies that will help you – locking the stable door before the horse has bolted
• The critical window – statutory year end until completion
• The relationship with working capital – timing sale to benefit your client

Group exercise – target NAV: your team is at the final stages of negotiation and, on your client’s behalf, you are concerned about target NAV. There are lots of arguments flying around the negotiating table right now. Which arguments are going to help your case? Which arguments do you need to counter and how?

Other completion mechanisms – locked box

• Problems with a traditional mechanism
• Advantages of locked box
• Locked box: how does it work?

Other sale & purchase issues

• Earn outs

Earn outs: delegates are supplied with a sample earn out from their client’s lawyer, who has asked for your input. What issues do you see there? What would it make sense to negotiate over? What could you achieve for your client here?

Financial Issues in Acquisition Agreements Course wrap up – key opportunities

• The headline offer
• Debt definitions
• Working capital
• Completion accounts and net assets target

What our clients are saying about the course

“An interactive course with lots of opportunity to discuss & debate practical examples”

“The trainer was motivated, animated & involved and got a good group interactions”

“A well-presented course that was pitched well for all levels and kept you engaged with lots of practical knowledge”

“Super presenter who kept a difficult subject interesting”