United Kingdom

Contract Assistance / Sale Purchase Agreements 

KPMG professionals have considerable experience in dealing with the consequences of imprecise or unintended drafting.  Our professionals are able to conduct an independent review of the agreement as it progresses through its drafts.  Our early involvement is essential, and enables us to suggest ways in which risk can be reduced and managed in the final contract

What's on your mind?


  • Accounting provisions of legal agreements are usually drafted by commercial lawyers, who (understandably) may not fully appreciate the consequences of using certain accounting terminology or defining accounting concepts.
  • As negotiations progress, agreements often become repetitive and over-complicated as more and more conditions and protections are built into them.  The end result may be difficult to interpret, and it is not uncommon to find clauses contradicting each other.
  • Beyond these general concerns, some forms of sale mechanism are inherently vulnerable to accounting manipulation (for example earn-outs and completion accounts).
  • In all these situations it is difficult for those directly involved in negotiating an agreement to retain the degree of detachment required to read it critically and identify risks and discrepancies, particularly if there have been many drafts.


How we can help 


The main areas in which we offer advice are: 


  • the structure of any price adjustment mechanism;
  • defining the accounting basis for any completion accounts;
  • the mechanics of the completion accounts process;
  • the form of any dispute resolution process;
  • the scope of accounting warranties and indemities;
  • future plans for add-on acquisitions and divestitures;
  • locked box mechanisms.



Bringing you peace of mind


  • Comfort that the accounting-related wording in sale and purchase agreements has been independently reviewed
  • Confidence that specialists who have experience of disputes have checked and where necessary suggested drafting changes to the accounting-related areas in an SPA
  • Knowledge that any risk areas in completion accounts mechanisms and in the process for agreeing/determining them will have been brought to your attention
  • Ensuring that you are kept up to date with market practice (e.g. re locked boxes, accounts warranties, etc), which evolves over time
  • If you’re a purchaser and there is a locked box mechanism,  knowing that you will have received the right advice in order to ensure you are protected
  • Support in meetings with counterparty and/or its advisors 



 Why KPMG?


    • We use a Forensic mindset applied to M&A situation;
    • We pay attention to detail while looking at the big picture.


Case study


KPMG assisted its multinational client with the acquisition of a business which was to be carved out of multiple legal entities in multiple countries. Our client needed to know what the business would look like post-deal, the likely working capital requirements in a standalone state, and how this compared to the actual assets being purchased.

We assisted the client to:


  • understand the structure and contents of the business being purchased;
  • clarify the level of normalised working capital which would be required by the business in a standalone state;
    ensure there were indemnities in respect of any liabilities which should not have been assumed;
  • consider some of the practical issues which needed to be addressed in order to achieve the intended final position; and
  • ensure that this was all reflected in the SPA.


Marc Summers   

Marc Summers


0161 246 4079


Ivan Seery   

Ivan Seery


020 7694 2539