U.K. M&A Deals: What a U.S. Buyer Should Expect

This article explores the significant differences between market deal terms in the U.S. and U.K., with an additional focus on what buyers should expect when a business is being sold by a U.K. private equity fund.

Typically, U.S. private stock deals are executed on a ‘cash-free, debt-free’ basis, incorporating upward and downward adjustments to the agreed-to purchase price based on post-closing metrics.

Conversely, the ‘locked box’ method is gaining prevalence in the U.K. This approach involves an equity price being established using a historic set of accounts which the buyer has no ability to adjust after closing. If changes to these accounts occur, the buyer’s only right of claim is under contract.

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