Classification: Under the Radar
Negotiation Time: Minimal
Transaction Costs: Insignificant
Major Impact: Transaction Completion
What is This? Both sides have to agree when and where the Closing will happen; this section is where they put those details in writing.
The Middle Ground: This clause states the procedural details relating to the Closing, including the date, time, and place where the Closing will occur. It also states when the Closing will take effect for legal purposes (often at 11:59 pm on the Closing Date).
Purpose: This section is purely informational and is included mostly for the sake of convenience. Once the parties agree on a Closing Date they are not likely to give a second thought to this section until that date approaches.
Buyer and Seller Preference: Both parties will want the Closing Date to fall on a weekday so wire transfers can be executed and any last-minute approvals or other closing-related items can be obtained.
Differences in a Stock Sale Transaction Structure: None.
We want The Middle Ground to be an ongoing dialogue for and resource to the lower middle market M&A community. The outline above is generally applicable, but there is always specific case law and nuance around certain industries that can be useful in helping buyers and sellers come together. If you are a lawyer or deal professional, we encourage you to add your perspective below.