Executive Summary
This case concerns a dispute under a Share Purchase Agreement (SPA) dated 10 August 2015, whereby CSC Computer Sciences Ltd (CSCL) acquired Fixnetix for an initial $89.3 million plus deferred consideration (Earnout) of up to $25.7 million based on financial performance targets for Years 1 and 2 post-acquisition. The SPA sets out detailed mechanisms for calculating and disputing Earnout payments, including a multi-stage dispute resolution process involving negotiation, accountants’ mediation, and binding independent accountants’ determination. The High Court judgment clarifies the contractual interpretation and enforcement of these provisions.
Sanctions Highlights
— No sanctions implications identified in the case text.
Emerging Risks
- Potential for protracted disputes over deferred consideration calculations due to complex Earnout definitions and reliance on accounting interpretations under US GAAP.
- Risk of delayed payments impacting seller liquidity and post-acquisition integration.
- Possible reputational risk for CSCL/DXC if disputes become public or affect investor confidence.
Geopolitical Impact
- The case involves UK jurisdiction (England and Wales High Court) and companies with US ties (CSCL’s parent merged with Hewlett Packard Enterprise forming DXC).
- Fixnetix serves capital markets participants globally, implicating cross-border financial infrastructure interests.
- No direct geopolitical conflict but highlights UK-US corporate transactional interdependencies.
Economic Intelligence
- The transaction valued Fixnetix at approximately $115 million including earnouts, reflecting significant investment in trading infrastructure services.
- Earnout targets ($80M Year 1, $115M Year 2 revenue) indicate high growth expectations in fintech and market data services.
- The case underscores the economic importance of precise contractual mechanisms in high-value IT and financial services M&A deals.
Strategic Recommendations
- Parties in similar transactions should ensure clear, unambiguous earnout definitions and robust dispute resolution clauses to mitigate litigation risk.
- Maintain comprehensive and transparent accounting records aligned with agreed standards (US GAAP here) to support earnout calculations.
- Consider early mediation and expert accountant involvement to resolve disputes efficiently before escalation.
- Monitor reputational and financial impacts of earnout disputes on corporate groups, especially those with cross-border operations.
- Legal teams should advise clients on waiver provisions and the binding nature of independent accountants’ determinations to avoid protracted appeals.
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**Source Notes:** Sanctions Intelligence Digest, [https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/302.html](https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/302.html)