Closing.

The closing phase of a deal is normally the part with the most tension. A lot of time, expense, and resource has gone into arriving to this point, and the bidder, vendor, and management are all very close to securing a deal. However, final preparations and negotiations need to take place before the target is acquired. During the exclusivity period once the confirmatory due diligence arrangement of the financing and preparation of the acquisition structure have been completed, negotiations will start on the legal documentation. The main document is the share purchase agreement or SPA between the bidder and vendor, the contract, which dictates the terms of the transaction, but also potentially a shareholder agreement, which governs the rights between different shareholders. Financing documents with banks, which include the terms and conditions of the debt financing management incentive agreements with management equity stakes mainly for the CEO, CFO, and top managers, anti trust filings for larger targets and other legal board resolutions and approval documents. In addition, if the transaction is a public to private P to P transaction, there are rules governed by stock exchanges that need to take place around disclosing information on the deal to the public, putting out an offer to buy shares and minimum shareholder acceptance thresholds. Groundwork to prepare drafts and skeleton documents have often already been prepared during the preceding stage. However, these now come into detailed focus and become a top priority. Senior partners are normally very involved with negotiations in the closing stage with junior professionals helping manage the process. Advisor help is key during this period, lawyers take a driving seat and will be busy on most of the previously mentioned documentation. Banks will have their teams and legal representatives working on the credit agreements, financing structure, and possibly lender presentations for syndication and ratings. Auditors will be helping execute the structure and working closely with the lawyers on the SPA, especially the accounting completion mechanism. SPVs and other closing documentation. Consultants might be working on last minute commercial and strategic work to help finalize the operating model. The investment banks will be helping with closing negotiations and process management. The private equity deal team will be busy managing and overseeing all of these processes and their respective advisor teams. Once all documents are finalized and in place, there is signing of contracts and documentation, followed by a short period of legal and structural work, which finally allows for wiring of funds in exchange for shares effectively closing the deal and transferring ownership.