8-K Item 2.01: Completion of Acquisition or Disposition of Assets

8-K Item 2.01 is the disclosure a public company makes when it, or a majority-owned subsidiary, completes the acquisition or disposition of a significant amount of assets other than in the ordinary course of business. It is filed within four business days of closing.

How it works

"Significant" is generally measured against the company's own size: an acquisition or sale is typically significant if the assets, or the business acquired, exceed 10% of the company's total assets, using the SEC's significance tests. The filing states the closing date, what was bought or sold, from or to whom, the consideration paid and how it was funded.

For a significant acquired business, the company must also provide audited financial statements of the target and pro forma financial information under Item 9.01. These can be filed by amendment within 71 calendar days after the initial 8-K was due, which is why many acquirers file an 8-K/A roughly two to three months after closing.

Item 2.01 usually comes at the end of a sequence: Item 1.01 when the merger agreement is signed, then Item 2.01 when the deal closes.

Why it matters for traders

Closing ends the deal spread trade. For a target, Item 2.01 often comes alongside delisting, as shares convert into cash or acquirer stock. For the acquirer, the later 8-K/A with pro forma numbers is the first clean look at how the combined company's revenue and earnings stack up, and it can shift estimates. Divestitures under Item 2.01 matter too: proceeds may fund buybacks or debt paydown.

Example

A hypothetical industrial company, Kestrel Industrial (KSTL), with $5 billion in total assets, closes its $750 million purchase of a sensor maker. Because the deal exceeds 10% of total assets, KSTL files an 8-K under Item 2.01 within four business days and files the target's audited financials by 8-K/A about ten weeks later.

FAQ

What is the difference between Item 1.01 and Item 2.01?

Item 1.01 covers signing a deal; Item 2.01 covers closing it.

Why is there a later 8-K/A after an acquisition?

The rules allow the target's financial statements and pro forma information to be filed up to 71 days after the original 8-K deadline.