Glossary

Purchase Agreement

A contract used to transfer the ownership or sale of a business.

See Also

Representations & warranties.

Tips

There are different types of purchase agreements:

  • Asset Purchase Agreement (APA): An agreement by which a business sells some or all of its assets to an acquirer, and the sale is structured as an asset purchase or asset sale.
  • Definitive Purchase Agreement (DPA): The word “definitive” implies that the agreement is the final or definitive agreement signed between the buyer and the seller. This is commonly seen in legal agreements as “Definitive Agreement” because the purchase agreement can often take several different forms, and the parties may not know what form the transaction will take.
  • Stock Purchase Agreement (SPA): A transaction structure where the buyer purchases all of the stock of the target company from the selling stockholders, often resulting in the target becoming a wholly owned subsidiary of the buyer.

Related Resources

M&A Closing Process | A Complete Guide

M&A Purchase Agreement | A Complete Guide

M&A Reps & Warranties | A Complete Guide

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