Working Capital Adjustment Process

This video describes how the working capital adjustment is made in a control private equity or M&A transaction.
In a financial model formulas automate what humans must negotiate. In this post and the associated video we will walk through the documents that must be exchanged and the responsibilities of both the buyer and seller for the working capital adjustment in a private equity transaction.
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[@carveout2512]

Is this similar to “minimum cash” in S&U schedules?

[@ASimpleModel]

I would say it can be a component of this adjustment, but it's not the adjustment itself. PE firms will sometimes want an additional cash balance at close to manage any uncertainty as it relates to the working capital PEG. Hope that helps!