Completion accounts and locked box are two primary pricing mechanisms used in mergers and acquisitions to determine the final purchase price. This guide explains how each structure works, how working capital and net debt adjustments are handled, and why completion accounts dominate U.S. middle-market transactions while locked box structures are more common in Europe.
A revenue peg and a working capital peg are two different mechanisms used to determine purchase price adjustments in M&A transactions. While working capital pegs are the standard approach in most middle-market deals, revenue pegs may be used in certain asset-light or recurring-revenue businesses. This guide explains how each method works, when buyers use them, and how they affect the bridge from enterprise value to final seller proceeds.
A practical guide to purchase price adjustments in M&A, including working capital true-ups, net debt, estimated closing statements, caps, collars, escrows, accounting policies, disputes, negotiation, and examples.