What is a Deal Sheet? A deal sheet refers to a process record of the work experience of an entrepreneur or employee in past financial investment deals. The documentation of deals made by an individual in the deal sheet provides proof of suitability for working on similar projects. Most people who prepare deal sheets are…
What is a Business Deal? A business deal refers to a mutual agreement or communication between two or more parties who want to do business. The deal is usually carried out between a seller and a buyer to exchange items of value such as goods, services, information, and money. It is considered to be completed…
What is Acquisition Structure? Acquisition structure is defined as the general framework or arrangement upon which the acquisition of a company will be organized. The acquisition structure basically breaks down the enterprise value of the company into the non-cash and cash consideration components. Non-cash consideration may comprise vendor takebacks, rolled equity, earnouts, etc. Additionally, the…
What is a Clearing House? A clearing house acts as a mediator between any two entities or parties that are engaged in a financial transaction. Its main role is to ensure that the transaction goes smoothly, with the buyer receiving the tradable goods he intends to acquire and the seller receiving the right amount paid…
What is a Friendly Takeover? In M&A transactions, a friendly takeover is the acquisition of a target company by an acquirer/bidder with the consent or approval of the management and board of directors of the target company. A friendly takeover is the opposite of a hostile takeover. The latter is a type of acquisition in…
What is Strategic vs. Financial Buyer? The question of Strategic vs Financial Buyer typically comes up when a company is being sold, as in M&A or LBOs. A strategic buyer is typically after horizontal or vertical expansions, looking for strategic synergies that will improve their operations. Their primary objective is to identify a business whose…
What is Net Asset Liquidation? Net asset liquidation or net asset dissolution is the process by which a business sells off its assets and ceases operations thereafter. Net assets are the excess value of a firm’s assets over its liabilities. However, the revenue generated by the sale of the net assets in the market might…
What is a Poison Put? A poison put is a defense strategy against a hostile takeover. It involves the issuance of bonds by the target company that can be bought back prior to their maturity date. The poison put defense is a pre-offer defense mechanism and can be considered a variant of the poison pill…
What is an Arm’s Length Transaction? An arm’s length transaction, also known as the arm’s length principle (ALP), indicates a transaction between two independent parties in which both parties are acting in their own self-interest. Both buyer and seller are independent, possess equal bargaining power, are not under pressure or duress from the opposing party,…
