Glossary · Deal process
Binding offer
Also called binding bid, final bid
Definition
A binding offer is the bid a buyer submits after due diligence, usually with its comments on the draft purchase agreement and evidence of financing. Despite the name, it normally only becomes legally binding when the purchase agreement is signed.
Related terms
Indicative offer A first, non-binding price and set of terms from a buyer, used to pick who goes through to due diligence. Share purchase agreement The contract by which a buyer acquires the shares of a company, with the price, warranties and conditions. Exclusivity period A set time in which the seller agrees to negotiate with one buyer only. Bolt-on acquisition A smaller company bought to add to an existing platform business, common in private equity. Buy-side The buyer's side of a deal: the acquirer or investor, and the advisers who help them find, check and price a target. Carve-out The sale of a division or business unit that has to be separated from its parent company. Clean team A small, ring-fenced group allowed to see a competitor's sensitive data during a deal, under strict rules. Corporate development The in-house team that finds, runs and integrates a company's acquisitions and partnerships.