M&A Purchase Price Adjustment Clauses

Crafting Provisions to Mitigate Buyers' Financial Risks and Achieve Fair Compensation for Sellers

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Thursday, March 29, 2012

Recorded event now available

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Program Materials

This CLE webinar will provide deal counsel with a review of the benefits and importance of structuring a purchase price adjustment provision in an acquisition agreement. The panel will review key issues to consider and offer approaches for crafting the purchase price adjustment terms.


Purchase price adjustment provisions provide a means for the acquiring company to adjust the final purchase price when there is a time lag and change in value of the target company between signing and closing of the acquisition. The provisions also allow for a review of the target’s financials post-closing.

Post-closing adjustments apportion the target company’s profits and financial risks during the pre-closing period. To ensure that closing working capital is considered, the adjustment should reflect the target’s current assets and liabilities at closing.

Negotiating purchase price adjustment terms and crafting the clause involve focus on several key issues, such as defining working capital, setting the baseline amount, specifying accounting principles to be used, and understanding indemnification overlap with the working capital adjustment.

Listen as our authoritative panel of M&A attorneys discusses the structure of purchase price adjustment provisions in the acquisition agreement and outlines effective approaches to negotiate and craft the clauses.



  1. Purchase price adjustment provisions
    1. Benefits
    2. Common clauses
  2. Issues to consider
    1. Defining working capital
    2. Setting the baseline amount
    3. Accounting methods/principles
    4. Indemnification
  3. Drafting strategies


The panel will review these and other key questions:

  • What issues should deal counsel take into consideration when drafting purchase price adjustment provisions in acquisition agreements?
  • What are the most common post-closing adjustments used in the purchase agreement?
  • How can the working capital adjustment overlap with indemnification provisions for breaches of representations and warranties of the seller?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.


W. Bryan Rakes
W. Bryan Rakes


His focus is business transactions, corporate finance and general business advisory services. He represents emerging...  |  Read More

Michael T. Pedone
Michael T. Pedone

Vice President & Deputy General Counsel
Redwood Capital Investments

He joined Redwood after 10 years practicing law at Venable LLP, where he focused on mergers and acquisitions,...  |  Read More

Matthew Roberson
Matthew Roberson

Senior Vice President
SC&H Capital

He has more than a decade of experience in M&A transactions, providing financial and strategic advisory services...  |  Read More

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