Published by Evolution Capital | IT/Telco M&A Specialists | 25 Years | 250+ Transactions
Evolution Capital · 25 Years · 250+ Deals
How To Lose a Buyer in 90 Days
Signing the Sale and Purchase Agreement is not the finish line. It is the beginning of a 60 to 90-day obstacle course where more deals collapse and more value erodes than at any earlier stage in the process. Understanding what can go wrong, and preparing for it, is the difference between receiving your agreed price and watching it shrink.
Published by Evolution Capital | IT/Telco M&A Specialists | 25 Years | 250+ Transactions
25+
Years in technology M&A
250+
Transactions
$1bn+
In completed transactions
“The last 90 days can undo months of preparation, negotiation and work.”
Evolution Capital · From the trenches
- At a Glance
What You'll Learn.
01
Why Signing Isn’t Completion
02
What the SPA Actually Commits You To
03
The Eight Ways Deals Die Between Signing and Completion
04
Price Chipping: Using the Danger Zone as Leverage
05
FDD Failures That Collapse Deals
06
How to Protect Yourself in the SPA and Interim Period
07
What Completion Day Actually Looks Like
09
Post-Completion: It’s Still Not Over
10
How Evolution Capital Can Help
No, despite what you might conclude from reading a collection of articles about deal preparation, I do not write for Composure Magazine. I do not have the Hollywood cheekbones of Kate Hudson or Matthew McConaughey. And no, not all M&A deals follow the plot of a romcom where everything works out better than you could ever have expected, where the couple who seemed destined to fall apart find each other at the airport and live happily ever after.
Don’t get me wrong. We have absolutely had clients achieve outcomes that exceeded their expectations: higher prices, better terms, buyers who turned out to be genuinely transformational partners. Those deals exist. They are real, and they are deeply satisfying.
But there is also a reality that this series of articles would be incomplete without addressing. Deals can and do fall apart, or lose significant value, in the final weeks before completion. After everything, after months of preparation, due diligence, negotiation, and the emotional weight of deciding to sell the business you have built, the last 90 days can undo it all.
The champagne toast felt premature.
The seller had just signed the Sale and Purchase Agreement for his managed services business. £13.5 million enterprise value. Weeks of negotiation behind him. In his mind, the deal was done.
His lawyer gently corrected him: “We’ve exchanged contracts. Completion is still 45 days away. And frankly, this is where most deals that are going to collapse actually fall apart.”
The seller was confused. “What do you mean? We’ve signed a legally binding contract. Surely we’re past the risky bit?”
Forty-five days later, after customer consent failures, employee departures, working capital disputes, an unexpected contract termination, and near-constant conflict, the transaction finally completed.
The seller received £12.8 million instead of £13.5 million. He was exhausted, bitter, and shocked that a “done deal” had nearly collapsed multiple times.
As Maverick would say: you’re heading right into the danger zone.
Welcome to it. Embrace it.
The Danger Zone Between Signing and Completion
Evolution Capital
Why Signing Isn't Completion
In smaller transactions, signing and completion can happen simultaneously: parties agree terms, sign documents, money changes hands in a single day. But in most lower to mid-market IT services deals, there is a gap between signing and completion. This gap exists because regulatory approvals may be required, customer contract assignments need consents from customers with change-of-control provisions, employee consultation is legally required under TUPE, buyer financing conditions must be satisfied, and working capital calculations need to be finalised.
These processes take time. During that time, the deal remains genuinely at risk.
Evolution Capital
What the SPA Actually Commits You To
Before understanding what can go wrong, it helps to understand what you have actually signed.
The Sale and Purchase Agreement is the binding legal contract governing the entire transaction: typically 80 to 150 pages covering purchase price mechanics, conditions precedent, covenants, warranties, indemnities, Material Adverse Change provisions, termination rights, and the longstop date.
Several provisions create specific risk during the interim period.
The ordinary course of business covenant
requires you to operate normally between signing and completion. But what is “normal”? Can you replace a departing employee without buyer consent? Approve capital expenditure? Sign a customer contract with unusual terms? Each decision requires judgment and potentially buyer approval at exactly the moment when the buyer’s interests and yours are not perfectly aligned.
The Material Adverse Change clause
gives buyers an escape route if something genuinely bad happens. But what constitutes “material” and “adverse”? Is losing one customer material? Two? What if EBITDA drops 10% due to market conditions? These definitions are negotiated carefully but still create grey areas when applied to real situations.
Conditions precedent
are things that must happen before completion can occur. If customer consents are required and customers refuse or delay, what happens? If buyer financing conditions cannot be met, can they terminate? Each condition is a potential deal-killer that sits between you and your money.
This is not a document to skim or delegate entirely to lawyers. Understanding what you have committed to is critical to navigating the interim period.
Evolution Capital
The Eight Ways Deals Die Between Signing and Completion
Customer consent failures
Many IT services contracts contain change-of-control provisions requiring customer consent before the contract can be assigned to a new owner. What seems straightforward in theory creates real problems in practice, because customers use consent requirements as renegotiation opportunities.
We worked on a telecommunications transaction where the seller’s three largest customers, representing 38% of revenue, all had consent requirements. Customer A consented within two weeks without issue. Customer B took five weeks but eventually consented. Customer C, representing 15% of total revenue, used the requirement as leverage to demand price reductions and enhanced service levels.
The seller faced an impossible choice: accept materially worse commercial terms to secure consent, or risk the buyer walking away. After tense negotiation, the customer agreed to more modest adjustments, but it still triggered a working capital reduction of £180,000 due to reduced contract value.
In the worst case, a customer refuses consent and terminates the contract entirely. This can trigger MAC provisions allowing the buyer to renegotiate or walk away from the transaction.
Customer losses during the interim period
Even without consent requirements, customers can terminate during the interim period for reasons completely unrelated to the sale.
One managed services business had a top-five customer, representing 13% of revenue, give six months’ notice in week two of the interim period. The customer was consolidating suppliers globally for internal reasons: nothing to do with the pending sale or service quality.
The buyer invoked the MAC clause and demanded a £1.4 million purchase price reduction. After intense negotiation, they settled on £700,000 reduction plus earnout provisions around new customer acquisition to replace the lost revenue. The seller felt this was completely outside his control, and he was right. But the SPA gave the buyer the right to adjust, and they exercised it.
This is where the sunk cost fallacy becomes one of the most dangerous forces in a deal. By this point, the seller had invested months of time, emotional energy, and well over £150,000 in professional fees. Walking away and starting again felt unthinkable. The buyer knew this. The seller, despite being treated unfairly, accepted terms he would never have accepted at the beginning of the process, purely because the cost of stopping felt higher than the cost of continuing. It almost never is. But it feels that way in the moment, and that feeling is what buyers are counting on.
There is a particular version of this that emerges in the final two weeks before a planned completion date. Unforeseen demands arrive in quick succession, each individually manageable, collectively significant. The seller, so close to the finish line, so emotionally and financially committed to this specific outcome, just agrees to them. The alternative, stopping the process now, feels catastrophic. So they say yes to things they would have said no to at any earlier stage. Experienced buyers time their final demands deliberately for exactly this reason.
Evolution Capital
Key employee departures
When employees learn about the pending sale, which they must under TUPE consultation requirements, some choose to leave rather than transition to new ownership. Technical staff concerned about culture change, sales people worried about compensation structure, senior managers who preferred the founder’s management style, and employees with competing opportunities who use the uncertainty as a trigger to move.
Each departure weakens the business being transferred and gives buyers grounds to seek price adjustments. We have seen a top salesperson resign and join a competitor, taking customer relationships with them; three senior technicians give notice simultaneously, creating immediate delivery capacity concerns; and a finance manager depart at exactly the point when working capital calculations and completion mechanics required their involvement.
Getting your key employees onside before and during the interim period is one of the most important and most under-invested areas of deal preparation. The mechanics matter here. Retention arrangements, bonuses payable at or shortly after completion conditional on the employee still being in role, are a direct and effective tool. They align the employee’s financial interest with the deal completing, which is exactly what you need. The amounts should be meaningful relative to salary: a token gesture will not change the behaviour of someone who has had a better offer. A well-structured retention bonus for a senior engineer or account manager can be the difference between a stable and an unstable business at completion.
Beyond financial incentives, how you communicate with key employees matters enormously. Uncertainty is the enemy. People who don’t know what is happening fill the vacuum with their own assumptions, and those assumptions are rarely optimistic. Where possible, brief key people early, be honest about what you know and what you don’t, and arrange for them to meet the buyer directly so they can hear about the future from the people who will determine it. A buyer who is willing to invest time in direct conversations with the management team before completion is signalling something important: that they value the people, not just the business. That signal is worth a great deal.
- What Matters Most
What to Remember
01
Signing isn't completion
The transaction remains exposed until ownership and funds transfer.
02
The interim period creates real risks
Customers, employees, performance, financing and working capital can all affect the deal.
03
Small issues can add up
Multiple minor adjustments can become a significant reduction in proceeds.
04
The SPA matters
MAC clauses, conditions precedent, consent rights and longstop dates should be negotiated carefully.
05
Preparation starts before signing
Vendor DD, clean financial data and proactive risk identification give sellers more control.
Evolution Capital
Business performance deterioration
The period between signing and completion is rarely a seller’s finest operational moment. Seller attention is diverted by completion logistics, legal calls, and working capital debates. Employee morale is affected by uncertainty. Customers become nervous about the transition. Investment decisions are deferred because ownership is changing.
A cybersecurity services business signed in November with completion planned for February. December and January revenue dropped 15% compared to the prior year as two customer projects were delayed pending “clarification of who we’ll be working with,” the sales team became uncertain about future compensation, two employees departed reducing delivery capacity, and the founder was spending 40% of his time on completion tasks rather than client-facing work.
The buyer saw this as performance deterioration and invoked provisions allowing price adjustment. The result was a £400,000 reduction in purchase price based on interim performance shortfall.
This is precisely why the preparation that happens well before the sale process matters so much. A business with clean financial data, a well-organised data room, and documented processes moves through the diligence and completion phases far faster and with far less management distraction. The seller who has to spend three weeks during the interim period reconstructing financial information that should already exist is not just losing time: they are taking their eye off the business at exactly the moment it is most exposed. Every hour spent on completion administration is an hour not spent on customers, on staff, on keeping the thing you are trying to sell in the best possible shape.
Working capital manipulation and disputes
If the transaction uses completion accounts rather than a locked box, the final purchase price depends on working capital at completion compared to an agreed target. This creates perverse incentives. Sellers want to maximise working capital delivered at completion. Buyers want normalised working capital without artificial manipulation.
Even without any manipulation, working capital calculations create conflict. One transaction had a completion date in mid-December. The seller had just paid annual insurance premiums, annual software subscriptions, and a quarterly rent prepayment: legitimate prepayments that reduced cash but increased the prepayments asset. The buyer argued these should be excluded from working capital because they benefited post-completion periods. The seller argued they were part of the ordinary working capital cycle. Resolution took six weeks and £18,000 in accounting fees. The final adjustment split the difference, but the acrimony damaged the relationship going into integration.
The root cause of most working capital disputes is not bad faith on either side. It is that the definition of normalised working capital was not agreed with sufficient precision before signing, leaving room for legitimate but irreconcilable interpretations at completion. Businesses that track working capital monthly, on a consistent accruals basis, with deferred revenue properly calculated and debtor aging properly maintained, go into this process with a defensible position backed by data. Those that don’t are negotiating blind.
Financing falls through
If the buyer is using debt financing and their lender withdraws, due to market conditions, diligence findings, or covenant breaches triggered by interim period events, completion cannot happen without alternative funding.
We worked on a deal where the buyer’s debt facility was contingent on certain customer concentration thresholds. When one major customer gave notice during the interim period, the concentration metrics breached the lender’s requirements. The lender withdrew. The buyer secured alternative mezzanine debt but at materially worse terms and with a 45-day delay. The seller faced extended uncertainty, additional legal costs, and increased risk that the buyer might invoke MAC rather than accept worse financing terms.
Material adverse change events
MAC clauses are the nuclear option: allowing buyers to terminate or renegotiate if something truly damaging occurs. What typically qualifies includes loss of customers representing 15 to 20% or more of revenue, EBITDA decline of 15 to 20% or more from an agreed baseline, loss of key employees where impact is demonstrably material, regulatory action preventing operation of the business, and litigation or claims exceeding defined thresholds.
What typically doesn’t qualify includes normal business fluctuations, general market conditions affecting all industry participants, seasonal variations within historical ranges, and events that were already disclosed during diligence.
The grey area is where most disputes live. When a customer representing 12% of revenue terminates, is that material? What if it’s two customers at 8% each? What if EBITDA drops 13%: close to but not quite at the 15% threshold? These situations create intense negotiation. Buyers push for price adjustments. Sellers argue MAC hasn’t been triggered. Neither side wants litigation, so unpleasant compromise often results.
The interim period also has a habit of surfacing contingent liabilities that didn’t appear during the main diligence workstream. Legal correspondence reviewed late in the process. A regulatory notification that arrives after signing. A customer claim that crystallises at the wrong moment. Each of these can trigger renegotiation even where the main FDD process concluded cleanly. The seller who has proactively identified and disclosed known risks before signing is in a far stronger position when unexpected issues arise: they have established a pattern of transparency that gives the buyer less room to treat every new discovery as a systemic problem.
Death by a thousand cuts
Even without major individual events, the cumulative effect of small issues erodes value. Working capital ends up £150,000 below target. One customer renegotiates terms down slightly. Two employees leave requiring replacement costs. Interim period EBITDA comes in 8% below expectations. A deferred maintenance issue is identified requiring £80,000 of immediate spend.
None individually triggers MAC or major repricing. But collectively they enable the buyer to demand £500,000 to £800,000 in adjustments through accumulated small reductions. The seller is in the weaker negotiating position at this stage because walking away means restarting the entire process.
Price chipping: using the danger zone as leverage
Price chipping deserves its own mention here because the interim period is where it most commonly happens, and where it is most effective.
After signing, the seller is committed in every meaningful sense: financially, emotionally, and practically. The business has been partially disrupted by the diligence process. Senior staff know a sale is underway. Walking away means starting over, re-engaging the market, and explaining to new buyers why the previous deal collapsed. The buyer knows all of this and has modelled the seller’s commitment curve carefully.
The typical pattern: three to five weeks into the post-signing period, the buyer’s team surfaces a collection of findings. Some are legitimate. Others are aggressive interpretations of normal owner-managed business characteristics dressed up as material discoveries. The buyer proposes a price reduction. By this stage, the seller is in the weakest negotiating position of the entire process.
The response that matters most is to require written documentation of every claimed adjustment with specific financial calculations. Vague assertions do not justify price reductions. A claim that EBITDA is overstated needs to be supported by specific evidence of which costs are understated or which revenues are non-recurring, with the arithmetic showing how that translates to a valuation adjustment. Many chips are built on assertions that dissolve when pressed for detail.
Having advisers who have seen this before, who know what is standard in IT services transactions and what is aggressive, and who are not emotionally invested in closing at any cost, is the most effective structural protection. A seller who has spent months preparing the business, surfacing and documenting known issues proactively, and building financial data that is clean and reconcilable has also removed most of the ammunition that opportunistic chips depend on.
FDD failures that collapse deals
It would be incomplete to discuss the danger zone without acknowledging that financial due diligence itself can kill a deal. Not all FDD processes result in adjustments or chips: some result in the buyer walking away entirely.
The most common triggers for a deal collapse at FDD stage: revenue that cannot be reconciled to source documents, EBITDA that materially overstates sustainable profitability once normalised, undisclosed liabilities that emerge during legal or financial review, and data quality so poor that the buyer simply loses confidence in the numbers. In each of these cases, the problem is not the underlying business. The problem is that the business could not demonstrate its quality through evidence.
We have seen deals collapse in week six of a diligence process because the seller could not produce a customer revenue schedule that reconciled to the management accounts. Not because the revenue wasn’t real: because the records to prove it weren’t there. The buyer concluded that if this fundamental data point wasn’t available, they could not underwrite anything else with confidence. They walked.
The sunk cost trap applies here too. A seller who has spent four months in a process and £180,000 in fees is not well-positioned to think clearly about whether to push forward with a buyer whose confidence has been fatally damaged, or to restart with a better-prepared data room and a cleaner story. But sometimes restart is the right answer.
How to Protect Yourself in the SPA and the Interim Period
Negotiate strong deal protection upfront
Protection happens in the SPA negotiation, not after issues arise.
Narrow the MAC definition to exclude normal business fluctuations, seasonal variations, and market conditions affecting the industry generally. Only truly material, company-specific adverse events should qualify. The threshold should be 15 to 20% EBITDA decline, not 10%.
Make conditions precedent specific, objective, and time-bound. Vague conditions create holdout risk. “Receipt of written consent from customers A, B, and C by [specific date]” is far preferable to “satisfactory customer feedback.”
Include a firm longstop date of no more than 90 days from signing. If the buyer cannot complete by then without good reason, you should have the right to terminate and claim damages.
Limit buyer consent rights under the ordinary course covenant. Keep the list of actions requiring consent narrow and thresholds high. You need to be able to run the business effectively during the interim period.
Manage customer communications proactively
When seeking consents, start with your strongest relationships and build momentum with early wins. Work with the buyer on customer-facing communications that emphasise continuity, investment, and enhanced capabilities.
Prepare answers to the questions customers will ask: about pricing, service levels, account management, technology direction. Align with the buyer in advance so you speak with one voice.
Don’t let customers exploit consent requirements as free negotiating leverage. Push back clearly. Make it evident that refusal to consent doesn’t change the transaction: it just changes the customer’s relationship with the business going forward.
For difficult customers, have the buyer join conversations to demonstrate a united front and commitment to the relationship.
Maintain employee stability
For key employees you trust, consider informing them before mandatory TUPE consultation. You need their active support during the interim period and cannot afford to lose them to uncertainty.
Retention arrangements for critical staff are essential, not optional. Bonuses payable at or shortly after completion, conditional on the employee still being in role, directly align individual interests with the deal completing. Size these properly: a meaningful amount relative to salary, not a token. The cost of a well-structured retention package for five key people is almost certainly less than the price adjustment a buyer will demand when one of them leaves during the interim period.
Arrange for the buyer to meet key employees early. Let them hear directly about vision, investment, and opportunity. Reduce uncertainty through information rather than allowing the vacuum to be filled by rumour. A buyer who engages directly with the management team before completion is demonstrating something important: that they value the people. That matters to people who are deciding whether to stay.
Maintain normal management routines. Don’t let performance slip because everyone is distracted by the sale. Keep the team focused on customers and delivery. The business needs to perform through the interim period, which requires management to be present and functioning, not absorbed entirely in completion logistics.
Lock down working capital agreements
Define the precise working capital calculation methodology, the target amount, and worked examples in the SPA itself. Don’t leave this to be negotiated under pressure during the interim period.
Operate working capital normally. Don’t manipulate collections, payments, or accruals. Sophisticated buyers spot this immediately and lose trust. The short-term gain is not worth the credibility damage.
Agree upfront that an independent accounting firm will determine the final working capital number if the parties cannot agree within fifteen days. This removes the calculation from a bilateral argument and gives both sides a predictable path to resolution.
Maintain business performance
Until funds are in your account, the deal is not done. Continue running the business as if the sale might fall through.
Stay visible with customers. Maintain relationships. Customer losses during the interim period can trigger MAC provisions and give buyers grounds to reprice. Keep the sales effort going. Preserve delivery quality. Document everything, including communications, decisions, and customer interactions, so that if disputes arise you have evidence to support your position.
Know your own termination rights
If the buyer fails to satisfy conditions by the longstop date without good reason, you have rights too. Don’t forget this. If the buyer is making unreasonable demands or deliberately dragging out the process, being prepared to walk away and pursue damages changes the dynamic.
Sometimes the credible threat of termination is enough to bring a buyer back to a reasonable position.
What Completion Day Actually Looks Like
When all conditions are satisfied and completion day finally arrives, there is still work to do.
The morning involves final working capital statements being exchanged and last-minute issues being resolved: there are always some. Legal teams confirm all documents are ready.
By midday, the buyer’s solicitors confirm funds are available and ready to transfer. The seller’s solicitors confirm all signing authorities are available. In the early afternoon, final documents are signed, share certificates or membership interests are transferred, and the buyer’s funds are wired.
In the late afternoon, the seller’s solicitors confirm funds received. Ownership formally transfers. Completion notices go to customers, suppliers, employees, and banks.
Even at this stage, delays happen: banking transfer timing, last-minute document issues, missing authorisations. Completions delayed by hours are common. Delayed by a full day is rare but possible. Until you receive confirmation that funds have arrived in your account, nothing is truly final.
“Signing is the beginning of a structured process, not the end of the deal.”
Evolution Capital · From the trenches
Post-Completion: It's Still Not Over
Even after completion, your involvement and exposure continue.
If using completion accounts, the final working capital adjustment can take thirty to ninety days to agree and settle: more disputes, more negotiation.
Funds held in escrow for warranty claims typically release twelve to twenty-four months post-completion, assuming no claims are made against them.
If there’s an earnout, you remain engaged for one to three years managing to targets with limited operational control.
Transition services commitments typically require three to six months of support helping the buyer integrate the business.
And the warranty period, during which you have ongoing liability for warranty breaches, typically runs eighteen to thirty-six months post-completion.
Completion is a major milestone. It is not the finish line.
The interim period between signing and completion is where advisers with deep experience in this sector earn their fees, because they have seen these problems before and know how to navigate them.
EC Analytics (Virtual CFO / CFO Assist)
Most of the problems described in this article are either caused or made worse by inadequate financial preparation before the deal process started. A business with clean, reconcilable financial data moves through FDD faster, with fewer adjustments and fewer confidence-damaging discoveries. A seller who has organised their data room properly can respond to diligence requests in hours rather than days, keeping management free to run the business through the interim period rather than scrambling to produce information that should already exist. EC Analytics builds this infrastructure before the sale process begins: the management accounts, the customer data, the working capital tracking, the documentation that turns a stressed interim period into a manageable one.
We negotiate SPA terms with the interim period in mind, not just the headline price. MAC clause thresholds, the scope of the ordinary course covenant, conditions precedent that are specific and time-bound, longstop date provisions, and working capital methodology: all of these are negotiating points that most sellers treat as boilerplate. In a challenging interim period, the difference between a well-negotiated SPA and a poorly negotiated one can be measured in hundreds of thousands of pounds.
We also manage the interim period actively, coordinating customer consent outreach, advising on employee communication and retention strategy, maintaining buyer relationships, and addressing issues as they arise rather than allowing them to escalate into disputes that erode value.
The issues that create interim period problems are almost always identifiable before signing if someone is looking for them. Vendor DD identifies the customers with change-of-control provisions, the working capital patterns that will generate disputes, the data quality gaps that could shake buyer confidence, and the employee or customer risks that need to be actively managed. Getting this work done before the SPA is signed means the danger zone is navigated with a map rather than discovered blindly.
The sellers who navigate the 90 days successfully are those who were prepared for what it involves.
How Evolution Capital Can Help
A Note on Confidentiality
- Our Blog
Related Articles
What is the difference between signing and completion in an IT services acquisition?
Signing, also called exchange of contracts, is when both parties execute the Sale and Purchase Agreement. Completion is when ownership actually transfers and money changes hands. In most lower to mid-market IT services transactions, there is a gap of 45 to 90 days between the two events, during which the deal remains at risk from a range of operational and commercial events. Signing is the beginning of a structured process, not the end of the deal.
What is a Material Adverse Change clause in an M&A transaction?
A MAC clause allows a buyer to terminate or renegotiate the transaction if something genuinely damaging occurs to the business between signing and completion. Typical MAC thresholds include loss of customers representing 15 to 20% or more of revenue, EBITDA decline of a similar magnitude from an agreed baseline, or loss of key employees where impact is demonstrably material. The exact definition is negotiated carefully, but grey areas inevitably arise when real events occur. Normal business fluctuations, seasonal variations, and market conditions affecting the industry generally should be explicitly excluded.
What are change-of-control provisions in IT services customer contracts?
Change-of-control provisions are clauses in customer contracts that require the customer’s consent before the contract can be assigned to a new owner following an acquisition. They are common in IT services and telecommunications contracts. If a customer refuses or delays consent, it creates a condition precedent to completion. Some customers use the consent requirement as leverage to renegotiate commercial terms, which can reduce contract value and trigger working capital adjustments.
What does "ordinary course of business" mean in an SPA?
The ordinary course covenant requires the seller to operate the business normally between signing and completion, without taking actions that fall outside the established pattern of operations. In practice, this means significant decisions such as large capital expenditure, new contracts with unusual terms, senior hires or departures, or changes to pricing or service terms may require buyer consent. The key negotiating point for sellers is keeping the list of actions requiring consent narrow and the thresholds high, so they retain practical ability to run the business effectively during the interim period.
What is a longstop date in an M&A transaction?
The longstop date is the deadline by which completion must occur. If conditions precedent are not satisfied or the buyer cannot complete by this date, either party may have the right to terminate the agreement, with potential consequences for the terminating party. For sellers, having a firm longstop date of no more than 90 days from signing is important protection against buyers who slow-walk the process or who use the passage of time to create additional leverage.
How are working capital disputes resolved post-completion?
If the transaction uses completion accounts, the working capital calculation is finalised after completion, typically within 30 to 60 days. The buyer prepares the completion accounts, the seller reviews and has the right to dispute. If parties cannot agree within an agreed period, typically 15 to 20 days, the dispute goes to an independent expert, usually a senior partner at an agreed accounting firm, whose determination is binding. This mechanism removes bilateral disputes from becoming litigation, but the process can still take months and cost tens of thousands in professional fees. Agreeing worked examples and clear methodology in the SPA before completion significantly reduces the scope for dispute.
- FAQ
Frequently Asked Questions
- Request a Confidential Consultation
Discover Your Business Value
Start with a strategic assessment to understand your maximum potential valuation in the current market.
Company
About Us
Blogs
Our Location
Careers
Our Services
About Us
Sell Side
Buy Side
Data Work
Resources
Faq
Client Dashboard
Support
Our Location
Contact Us
- (020) 3696 2810
- Info@evolutioncapital.com
- 68 King William Street, London, EC4N 7HR
- The Granary, Oak Lane, Chichester, PO20 7FD