Asset purchase Legal
Definition
Transaction situation where a business' assets and certain liabilities are acquired and folded into an existing company or transferred to a new company (Newco).
Comments
The final form of an asset purchase is through an Asset purchase agreement (APA). Where the situation allows, asset purchases are often preferred to stock purchases as unknown or hidden liabilities such as environmental issues stay with the legacy company.
Referring Terms
Stock purchase agreement (SPA), Asset purchase agreement (APA)For profiles of 1,400+ private equity firms, including portfolio and professional info, please consider a free 30-day trial membership.
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