Deal Sheet
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...
Acquisition Structure
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...
Friendly Takeover
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...
Strategic vs Financial Buyer
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...
Poison Put
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...
Scorched Earth Policy
What is a Scorched Earth Policy? In finance, a scorched earth policy is a tactic that a company can use to prevent a hostile takeover. Essentially what happens is that a company targeted for takeover does everything it can reasonably do to make itself unattractive, hopefully discouraging the potential acquirer from continuing the takeover attempt....
Godfather Offer
What is a Godfather Offer? A Godfather offer is essentially an offer that is so ridiculously favorable, that to refuse it would be a dereliction of financial responsibility. It most often occurs in the context of mergers and acquisitions, and refers to an offer made by one company to purchase or take over another company....
Dawn Raid
What is a Dawn Raid? A dawn raid refers to the sudden sweeping purchase by a potential acquirer of a substantial number of a target company’s shares the moment the market opens (“dawn”). A dawn raid is typically undertaken by a potential acquiring company in the context of a hostile takeover attempt. Hostile...
Takeover Bid
What is a Takeover Bid? A takeover bid refers to the purchase of a company (the target) by another company (the acquirer). With a takeover bid, the acquirer typically offers cash, stock, or a mix of both, “bidding” a specific price to purchase the target company for. Types of Takeover Bids The four different types...
Flip-In Strategy
What is the Flip-in Strategy? The flip-in strategy is one of the basic types of poison pill strategies that companies use to benefit their shareholders and help defend their company from an unwanted takeover. In the flip-in strategy, the target company – in order to defend itself against a hostile takeover – dilutes the value of...
