Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
How the SPA Indemnity Holdback Traps Sellers in M&A
Lucas and Luna break down one of the most overlooked clauses in a middle-market acquisition: the SPA indemnity holdback. Using a real-world case of a $50 million industrial distributor sale, they explain how a 15% holdback — meant to cover post-close breaches — became a leverage weapon for the buyer. They walk through the negotiation trap: standard language holds 10-20% of the purchase price in escrow for 12-24 months, with no interest accruing to the seller. Lucas shares how one seller lost $2.1 million in working capital adjustments and indemnity claims, plus another $400,000 in legal fees…
The skinny
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