DEAL STRUCTURE
The working capital peg: the adjustment after closing
The working capital peg is the level of current assets minus current liabilities, mostly receivables and payables, that the buyer expects the business to have at closing. After closing, actual working capital is compared to the peg and the price moves up or down. SRS Acquiom found purchase price adjustment provisions in 92 percent of recent private deals, and 89 percent resulted in an adjustment being paid. In a healthcare practice, where receivables are large and slow, the peg can move real money.
By Akim Guennani, Founder · Updated October 2026
92%
Recent private deals with a purchase price adjustment provision
51%
Final adjustments that favored the buyer (38% favored the seller)
0.27%
Median buyer-favorable adjustment as share of transaction value
How the adjustment works
At closing, the price is based on an estimate of working capital. Within a few months the buyer prepares a final calculation. If actual working capital is below the peg, you pay the difference, usually from a separate adjustment escrow; if it is above, the buyer pays you.
- The peg
- Usually a trailing average, often 12 months, of normalized working capital.
- The definition
- Which accounts count, for example net patient receivables, accrued payroll, and payer refunds owed.
- The process
- Deadlines for the buyer's statement, your review period, and an independent accountant for disputes.
Healthcare-specific issues
In home care and behavioral health, the biggest working capital item is usually patient receivables. How they are valued, net of expected denials, contractual allowances, and payer recoupments, drives the result. Accrued caregiver payroll and PTO, which can be large for hourly workforces, are often the biggest liabilities.
Agree on the accounting policies used for both the peg and the closing calculation, and use the same ones. Many disputes come from a buyer applying a more conservative reserve at closing than the one used to set the peg.
What the data shows
SRS Acquiom's 2026 Working Capital Purchase Price Adjustment Study covers more than 1,570 private-target deals closed from 2020 through the third quarter of 2025. Purchase price adjustment provisions appeared in 92 percent of deals closed from 2022 on, and 96 percent of deals with private equity buyers. 89 percent resulted in an adjustment being paid, and 75 percent used a separate adjustment escrow.
Buyers made an initial claim in 57 percent of deals, but only 51 percent of final adjustments went the buyer's way, and roughly 29 percent of deals disputed the buyer's first calculation. The median buyer-favorable adjustment was 0.27 percent of transaction value, but about one in five claims exceeded 1 percent. The median time for the buyer to deliver its post-closing statement was 90 days.
Illustrative example: a reserve dispute
Assume a peg of $1,200,000, set using a 5 percent reserve on patient receivables. At closing, the buyer applies a 9 percent reserve to $3,000,000 of receivables, lowering closing working capital by $120,000 and putting it $90,000 below the peg. Using the same 5 percent reserve as the peg would have left it $30,000 above. The figures are hypothetical.
Working capital checklist
Settle these points before signing.
Owner checklist
- Exactly which accounts are included and excluded
- Accounting policies, especially receivable reserves, applied consistently
- How the peg was calculated and over what period
- Treatment of accrued payroll, PTO, and payer refunds owed
- Deadlines for the buyer's statement and your review
- Independent accountant for disputes and a separate adjustment escrow
How Lartico fits in
Working capital terms are easier to negotiate when more than one buyer is at the table. Lartico introduces you to several qualified buyers so these terms, and not just price, are part of the comparison.
Sources and methodology
Public transactions provide market context, not a valuation quote for a private practice. Illustrative examples use hypothetical assumptions and are not predictions. This guide is educational and is not legal, tax, accounting, or investment advice.
- 1. 2026 M&A Working Capital Purchase Price Adjustment Study (SRS Acquiom). Prevalence, direction, and size of purchase price adjustments; escrow use; timing.
Reviewed October 2026
Questions owners ask
Straight answers, before you commit to anything.
What is a working capital peg?+
The target level of working capital the business should deliver at closing. The price is adjusted up or down by the difference between actual closing working capital and the peg.
How often do buyers claim money back?+
In SRS Acquiom's 2026 study, 51 percent of final adjustments favored the buyer and 38 percent favored the seller. The median buyer-favorable adjustment was 0.27 percent of transaction value.
How is the peg usually set?+
Commonly as a trailing average of normalized monthly working capital, often over 12 months, adjusted for seasonality and one-time items.
What should I watch for in a healthcare practice?+
How patient receivables are reserved for denials and recoupments, and how accrued payroll and PTO are counted. Use the same accounting policies for the peg and the closing calculation.
Related resources
Home care
Behavioral health
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