PEINVEST
Statements of fact and promises made by the seller in an acquisition agreement regarding the condition and attributes of the business being sold. Reps and warranties cover areas such as financial statements, legal compliance, employee matters, and material contracts.
The thorough investigation and analysis of a target company conducted before completing an acquisition. Due diligence typically covers financial, legal, commercial, operational, and environmental aspects to identify risks and validate the investment thesis.
A portion of the purchase price held by a neutral third party for a specified period after closing to cover potential indemnification claims. Escrow accounts protect the buyer against breaches of representations and warranties discovered after the transaction closes.
A non-binding document outlining the key terms and conditions of a proposed investment or acquisition. Term sheets cover valuation, governance rights, liquidation preferences, and other material deal terms, serving as the basis for definitive legal documentation.