What are Dead Deals? Dead deals refer to merger and acquisition deals that go through due diligence but do not close, due to various reasons related to either the seller or the buyer. When deals fail to close, various costs are incurred, both direct and indirect. These are referred to as dead deal costs. The…
What is a Deal Team? What is a deal team? Ownership transactions such as ESOPs, M&A, and recapitalizations are usually complex transactions that require the knowledge and skills of a wide range of professionals. A deal team needs to get all individual players contributing in the right measure and at the right time during the…
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…
