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Resources for Sound Business Decisions.™

Strategies to Avoid the Overpayment Trap

Strategies to Avoid the Overpayment Trap The Overpayment Trap explored how the M&A process is oriented toward getting sellers top dollar for their companies. Becoming mindful of the overpayment trap and deciding to take proactive measures to avoid it are essential first steps. This article provides specific strategies and techniques that you can use to […]

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The Value-Price Continuum

The price paid for a lawfully acquired business interest is a fait accompli—an accomplished and irreversible fact. The parties have negotiated, had an opportunity to perform their due diligence, reached a meeting of the minds and consideration has changed hands. The transaction is done—the cash register has gone Ka-Ching. While the price paid is a […]

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List of Common Measures of Value

Book Value is the difference between a company’s Assets and Liabilities as stated on the current Balance Sheet. Book Value is an accounting term and does not provide a meaningful measure of the business value. Liquidation Value is the net amount that would be realized if the business terminated and the assets are sold piecemeal. […]

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Confusion Over EBITDA

The August 2008 issue of Mergers & Acquisition magazine contains an interesting article entitled Refining Ebitda. The sub-title is: “Who knew Ebitda had so many definitions? As deal pros, lenders and companies fight it out in negotiations, the earnings yardstick often gets distorted.” So, the headline says EBITDA is a measure of earnings—simple enough. But […]

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Defining a Business Buyer’s Criteria

Although a great deal of time, talent, and money can go into closing an acquisition, an acquisition is not an end in itself. A merger or acquisition is a process. A successful outcome to this process begins with the formulation of your “value drivers” and criteria, and extends beyond the closing until the desired benefits […]

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