Unlike buy-side due diligence, in vendor due diligence (VDD) it is the seller himself who orders the audit process, thus demonstrating the authenticity of the financial statements offered about his company to potential buyers. Thus, the seller requests an independent...
kicker is a right, an exercisable warrant, that is added to a debt instrument as an incentive for potential investors, giving the debt holder the potential option to buy shares in the issuer. It is used exclusively for the benefit of lenders to increase their expected...
Locked-box mechanisms is used by the selling dealer to allowed him to ensure the operation and, I addition, cover the increase in value of the company are the cash and debt adjustment and the locked-box. In the locked-box, the parties agree on a fixed price based on...
Subordinated debt is a fixed income instrument with characteristics inferior to bank issues since its holder has a lower collection capacity offset by higher profitability, compared to other debt assets. It is halfway between debt and equity; It serves to complement...
In a company sale and purchase agreement, the earn-out is a portion of the purchase price that is subject to the achievement of certain (usually financial) milestones that will be verified after the closing of the sale and purchase. One of the main reasons earn-outs...
In the M&A and sell-side market, EBITDA is a very helpful tool for assessing a business’ market value and marketability. EBITDA is a financial indicator (an acronym for "Earnings Before Interest, Taxes, Depreciation and Amortisation") that provides a true picture...