Asset Purchase Agreement (APA)
An asset purchase agreement (APA) is a contract detailing the sale and transfer of specific assets from a seller to a buyer. It allows buyers to purchase certain assets of a company without acquiring the liabilities. APAs are commonly used in mergers and acquisitions, providing flexibility in structuring deals and minimizing risks associated with acquiring unwanted obligations. They are ideal for targeted acquisitions.
Key Takeaways
- Contract for the sale of specific assets.
- Used in mergers and acquisitions for targeted purchases.
- Helps avoid assuming liabilities.
- Offers flexibility in structuring transactions.
