When acquiring a company the buyer is generally prepared to take calculated risks, but requires security for the uncertainties revealed in the due diligence survey. Examples of such uncertainties are: incomplete environmental permits, the possibility of leases not being renewed, the departure of important managers, serious financial underperformance within a short period following take over, or any other threats to the success of the company to be acquired. The buyer requires 100% cover for such uncertainties. The best solution is to set up an escrow agreement and retain a certain amount of the purchase price, which is paid into an escrow account at
a reputable bank. This will provide maximum security for both buyer and seller.