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.
A practical guide to purchase price adjustments in M&A, including working capital true-ups, net debt, estimated closing statements, caps, collars, escrows, accounting policies, disputes, negotiation, and examples.
Net debt in M&A is the deal-defined bridge from enterprise value to equity proceeds. This guide explains the net debt formula, debt-like vs cash-like items, deferred revenue and lease nuances (ASC 842), and how LOI definitions and closing statements affect seller outcomes in middle-market transactions.