01
Fix the deal perimeter first
Identify shares or assets, target entities, intra-group links, debt, cash, property, IP, licences, employees and contracts. Exclusions and pre-closing restructuring are documented before price formation.
- Share deal
- The buyer acquires the legal entity, history and liabilities.
- Asset deal
- Each right and liability needs its own transfer route.
- Carve-out
- Functions, contracts, data, people and transitional services must be separated.
- JV
- Acquisition, governance, funding, deadlock and exit are designed together.
02
Due diligence is a decision system
The review asks whether the asset can be bought, what price should be paid, what must be fixed before closing, which warranties are required and where a specific indemnity is needed. Findings are ranked by probability, value, timing and controllability.
03
Price mechanism follows reporting quality
A locked-box requires reliable historic accounts and leakage control. Completion accounts adjust debt, cash and working capital at closing. An earn-out links consideration to future results but needs precise accounting rules, operating covenants and a dispute route.
- Locked-box
- Equity value date, leakage covenant and permitted leakage.
- Completion accounts
- Debt, cash and working-capital definitions plus expert process.
- Earn-out
- Metrics, period, buyer powers and anti-manipulation safeguards.
- Escrow / holdback
- A price reserve for defined obligations and claim periods.
04
Warranties should state verifiable facts
The package covers authority, title, accounts, tax, licences, material contracts, litigation, employees, IP, data and compliance. Article 431.2 of the Russian Civil Code permits agreed consequences for inaccurate representations, so scope, date, knowledge, materiality and disclosure must be explicit.
05
Separate known risks from the general warranty package
A known tax claim, litigation, environmental liability or other defined event calls for a specific indemnity. Article 406.1 permits contractual compensation for property losses arising from agreed circumstances; the trigger, amount or calculation and claim process should be determinable.
06
Disclosure protects only when it is specific
The seller identifies exceptions through a disclosure letter and agreed data room. The buyer tests how precisely the fact and consequences are described. A generic reference to a document population does not necessarily produce clear commercial risk allocation.
07
Conditions precedent separate signing and closing
They include regulatory clearance, corporate approvals, lender and counterparty consents, restructuring, intra-group debt settlement and remediation of critical breaches. The SPA allocates responsibility, timing, effort standard, long-stop date and failure consequences.
08
Seller protection means certainty and finality
The seller needs a clear price mechanism, defined warranties, effective disclosure, caps, de minimis and basket, claim periods, conduct of third-party claims and no double recovery. Liability should not remain open-ended after control passes.
09
Buyer protection means access and recoverability
The buyer needs complete information, repetition of key warranties at closing, specific indemnities, interim covenants, leakage control, termination rights for critical breach and an effective recovery source—escrow, holdback, guarantee or a solvent seller.
10
A closing book proves performance
One matrix tracks conditions, documents, signatories, originals, funds flow and control transfer. The final set contains agreements, approvals, registry evidence, payment confirmations, handover documents, notices and deferred obligations.
11
Dispute design starts in the SPA
Choose governing law, court or arbitration, language, notices, interim relief, confidentiality and enforceability. A separate independent-expert process may resolve price calculations without confusing accounting questions with legal disputes.
12
Items for the term sheet
Perimeter and structure; price range and mechanism; financing; exclusivity; diligence; regulatory conditions; core warranties and indemnities; escrow or holdback; interim operation; long-stop date; governing law and disputes; binding and non-binding provisions.