Completion accounts in transatlantic M&A: managing the final purchase price
Completion accounts in transatlantic M&A: managing the final purchase price
The price agreed at signing may not be the amount ultimately paid. In North American transactions, completion accounts remain the predominant purchase price mechanism.
Unlike a Locked Box, they determine final equity value after closing, using the target’s financial position at that point. For both buyer and seller, this creates an opportunity and a challenge: making sure the final amount reflects the business and financial position agreed in the deal.
Where can the process become difficult?
Between signing and closing, cash, debt and working capital can change. This may lead to unexpected price adjustments, extended post-closing discussions, differing interpretations of contractual terms or uncertainty over the Net Working Capital target.
These situations do not necessarily arise from a fundamental disagreement. They often reflect a lack of preparation, unclear calculation methods or insufficient process governance.
Using completion accounts to protect deal value
When the mechanism is clearly defined, completion accounts can help align the final purchase price with the target’s actual financial position at closing.
Key considerations include why completion accounts may be preferred in volatile markets; how a shorter period between signing and closing can reduce execution risk; why Target Net Working Capital is both a technical calculation and a commercial negotiation; and how precise contractual definitions and disciplined preparation can reduce the risk of post-closing disputes.
Price certainty is built through preparation before closing.
How Eight International can support you
We support clients throughout the transaction lifecycle, including through Vendor Due Diligence, Buy-Side Due Diligence, M&A Consulting and Legal Assistance, and Capital Markets Services.
From defining the pricing mechanism to reviewing completion accounts and helping prevent disputes, our teams work with clients to protect value throughout the deal process.
Eight International supports maritime-sector players across their projects, from financing structures and public tenders to port-practice benchmarking and investment-needs assessments. Our teams also provide financial and tax due diligence, valuation and modelling to help clients evaluate a project’s commercial potential, risks and financial viability.
Download the full report for further detail on completion account mechanics, risks and good practice.
