SPA Advisory

What is SPA Advisory?

SPA Advisory, or Sale and Purchase Agreement Advisory, from an accounting perspective in M&A is crucial in any transaction to ensure the commercial and pricing negotiations derived during negotiations and due diligence are accurately reflected in the transaction agreement. Transactions, buyers and sellers are becoming more sophisticated and not having the right accounting professional in your corner can have material impacts to transaction value and post completion mechanisms..

SPA Advisory covers:

Accounting definitions: clear and concise definitions in a transaction agreement ensure there are minimal speed bumps in the lead up to transaction completion.
Earnouts: whether you are the buyer of the seller, understanding what an earn out is and how it translates to overall transaction price is crucial.
Completion mechanism and completion statements: the negotiations and due diligence process is now over you want to explore the completion accounts mechanism process for completion. To avoid tension and conflicts in the post completion world the mechanism must be clearly defined and set out to ensure a seamless completion.

How can we help?

PCM Advisory can assist you in securing the most favourable value outcome from the SPA, including:

Enterprise Value to Equity Bridge: Negotiating the adjustments used in the Enterprise Value to Equity Value bridge with a structured approach and including robust arguments for and counter arguments to the proposed approach.
Working Capital profile and target working capital: there is no textbook definition of Working Capital. A Target working capital or ‘peg’ is also fiercely contested and negotiated in share sale transactions. It is a protection mechanism for both the Buyer and Vendor and determining a normalised level for the purpose of the SPA is key.
Preparing, reviewing and disputing completion accounts: our team are seasoned professionals in preparing, reviewing and disputing completion accounts for any transaction size and for both the Buyer and Vendor.

Don’t go through the SPA process alone. Whether you are on the buy or sell side, a corporate advisor can assist you to navigate the nuances of a transaction agreement from an accounting perspective and ensure you are progressing with your best foot forward.