26 Sep Understanding Reps & Warranties for Buyers and Sellers
Posted at 07:00h in
We’re diving into the in’s and out’s of reps and warrants within an M&A process in this episode of Shoot the Moon.
- Expect a reps and warrants provision in a purchase agreement, both buyers and sellers will have reps and warrants. You’re vouching for what you provided is correct.
- Buyers will ask for some type of surety in reps and warrants; expect a hold back. That could be 10% of the cash in the deal.
- Reps and warrants are for pre-close activities; you’re attesting what your providing is true and correct. This does not impact post transaction activities
- There could be options for a hold-back including reps and warrants insurance
- Breaches are exceptionally rare unless the seller is a bad actor