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Share Purchase Agreement - overview



Thu 28 December 2023 Share Purchase Agreement - overview

What is a Share Purchase Agreement?

A Share Purchase Agreement ("SPA") will be 1 of a number of key documents in a share sale transaction. Many key terms (see below) will apply regardless of the type of underlying transaction but there will be differences depending on whether the transaction is :-

Key terms in all types of Share Purchase Agreement

Potential risks, negotiating points and Issues

Navigating an SPA requires awareness of potential risks :-

Deferred Consideration

In many full company sales, the buyer will seek to agree that part of the purchase price is deferred. If agreed, this will deferred payment is often in the form of an earn out where part of the purchase price may be tied to the company's future performance, aligning buyer and seller interests and incentivizing post-closing value creation.

Another potential funding method with private equity investments is convertible loan notes. There are considerable risks for remaining shareholders


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