Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) gained prominence within the LBO community during the 1980s because it represented a number that could be used to determine the gross dollars that could be made available to service acquisition debt. At that time, EBITDA was more relevant because the deal criteria of the typical LBO […]
read moreUsing the Fair Market Valuation and the seller’s asking price as a starting point, there are seven critical factors that will influence the premium or discount to be applied in reaching a negotiated purchase price package. These seven factors include: The types of buyer. Financial parameters. The general attractiveness of the company. The relative negotiation […]
read moreNote to the Reader: This is the fourth in a series of articles that explore the definition, application and issues of including earn-outs in negotiated M&A transactions. In the last installment of this series, we explored the buyer’s considerations when deciding whether to propose an earn-out agreement to a seller. In this article, we will […]
read moreNote to the Reader: This is the third in a series of articles that explore the definition, application and issues of including earn-outs in negotiated M&A transactions. An earn-out can reduce a buyer’s initial investment, bridge the value gap and provide an incentive for the seller. For the value-oriented negotiator, the primary objective of an […]
read moreNote to the Reader: This is the second in a series of articles that explore the definition, application and issues of including earn-outs in negotiated M&A transactions. An earn-out is an opportunity for both buyer and seller to maximize their respective post-acquisition returns on investment, but it doesn’t always play out that way. Generally, there […]
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