Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The M&A Purchase Price Adjustment Trap That Cost a Seller $8 Million
In this episode of The Acquisition Talk with Fexingo, hosts Lucas and Luna dissect a purchase price adjustment trap that cost a medical device company's founder $8 million after closing. They walk through the mechanics of a 'locked-box' mechanism versus a traditional completion accounts adjustment, and explain how a single clause buried in the working capital definition allowed the buyer to reclassify $8 million in inventory as excess working capital post-closing. The discussion covers how the seller signed away the right to dispute the buyer's accounting methodology, why…
The skinny
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