This article explains how private equity buyers really underwrite a company in a live sale process, including how they think about normalized EBITDA, leverage capacity, downside protection, deal structure, and the gap between headline valuation and seller proceeds.
A founder-focused guide explaining how enterprise value becomes equity value, cash at close, and total seller proceeds after net debt, working capital, fees, escrow, rollover equity, seller notes, earnouts, taxes, and timing.
Earnouts in M&A can bridge valuation gaps between buyers and sellers, but they also introduce execution risk and complexity. This guide explains how earnouts work, how they affect cash at closing, common structures, real examples, and what sellers must negotiate to protect value in a transaction.
Rollover equity in M&A allows sellers to reinvest part of their proceeds into the post-closing business instead of taking all consideration in cash at closing. This guide explains how rollover equity works, why private equity buyers require it, how it affects cash at closing, what “second bite of the apple” really means, and what sellers should negotiate before agreeing to roll.
Seller notes are a common financing structure in middle-market M&A. Learn how seller financing works, why buyers use it, and how it affects deal structure and seller proceeds.
A seller-focused guide to enterprise value, equity purchase price, purchase consideration, transaction value, closing adjustments, and the difference between headline value and cash at closing.
A practical guide to run-rate EBITDA in M&A, including meaning, formula, annualization methods, run-rate adjustments, TTM and LQA comparisons, quality of earnings validation, valuation impact, private equity use, and seller preparation.
TTM EBITDA measures a company’s most recent twelve months of operating earnings. Learn how trailing twelve month EBITDA is calculated, how buyers use it in M&A valuation, and how it compares with run-rate and normalized EBITDA.
A transaction-focused guide to bridging EBITDA into free cash flow, FCFF, levered cash flow, debt paydown capacity, valuation support, and buyer underwriting in middle-market M&A.
Quality of earnings and normalized EBITDA are critical steps in how buyers evaluate a company’s true earnings power during an M&A transaction. This guide explains how reported EBITDA is adjusted, tested through diligence, and used to support valuation multiples in middle-market deals.