Completion Accounts
A post-closing price adjustment mechanism where the actual balance sheet at the completion date is compared against an agreed target to determine a price true-up.
Also known as: Closing accounts, Completion balance sheet
One-line definition
Completion accounts establish what cash, debt, and working capital actually looked like at closing, and adjust the equity price accordingly versus agreed targets.
Process
- Buyer (or seller) prepares completion accounts within 30–90 days of closing.
- The other party reviews and raises any disputes.
- An independent expert resolves unresolved disputes.
TS role
TS teams prepare or review completion accounts and the associated price adjustments, often the final and most contentious piece of a transaction.
Related terms
Locked Box Mechanism
A deal structure where the price is fixed at signing based on a historical balance sheet date, with no post-closing price adjustment.
Net Working Capital (NWC / WCR)
Net Working Capital (NWC), also called Working Capital Requirement (WCR) — the normalised working capital a target needs to operate, and a direct lever on the M&A purchase price.
Net Debt
The gap between Enterprise Value and Equity Value in a deal — gross debt minus cash, plus a long list of debt-like items.
Cash-Free Debt-Free
The standard basis on which M&A deals are priced: the Enterprise Value assumes the target is delivered with no cash and no debt at closing.