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Is the Price Right? Adjusting the Purchase Price Higher or Lower

April 19, 2022

Although the parties spend a considerable amount of time, money, and effort to place a dollar amount on the value of a business, things happen. A purchase price adjustment provision is a mechanism by which the purchase price may be increased or decreased as a result of changes to the target company’s financial condition or certain specified accounts between signing and closing. A purchase price adjustment better reflects the bargain struck by the parties at signing. Explore the various purchase price adjustment provisions negotiated in M&A transactions.   

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