Closing the Transaction
Once a private equity investment has been secured under letter of intent, the private equity firm is granted an exclusivity period to close the transaction. This starts the clock and provides a deadline for the work required to complete due diligence and negotiate the definitive agreements. In this course you will learn what is required to close.
In the previous lesson the working capital adjustment was explained in the context of an acquisition. In this lesson we will dive a little deeper into the calculation required by this adjustment and the documents that are exchanged in the process.
As it relates to the purchase agreement there are two potential approaches: (1) a simultaneous sign and close, and (2) a deferred closing. In this lesson you will learn why it is sometimes practical to pursue a deferred closing even though it can make negotiation more difficult.