Resources
M&A Glossary
M&A terminology for owners, buyers and advisors.
A
Why it matters — The structure determines what the buyer acquires and which assets, liabilities and contractual obligations transfer.
RelatedAsset Purchase·Share Purchase·Target Company·Deal Structure
Why it matters — Financing affects the buyer's purchasing capacity, transaction structure and financial risk.
RelatedCapital Structure·Financial Buyer·Private Equity·Seller Financing
Why it matters — Add-ons are a common acquisition strategy and can make smaller companies attractive targets for larger groups.
Why it matters — Adjusted EBITDA is often used as the basis for valuation, making the nature and justification of adjustments important.
RelatedEBITDA·Normalised EBITDA·Quality of Earnings·EV / EBITDA Multiple
Why it matters — An asset purchase can allow a buyer to acquire a specific business or activity without acquiring the seller's entire company.
Why it matters — Competition can give the seller greater negotiating leverage and a broader basis for comparing price and transaction terms.
RelatedBinding Offer·Exclusivity·Information Memorandum·Sell-Side
B
Why it matters — It represents a more advanced level of buyer commitment than an initial expression of interest.
RelatedLetter of Intent·Offer·Signing·Share Purchase Agreement
Why it matters — It can compensate for transaction costs and resources invested and may discourage a party from abandoning an agreed process.
Why it matters — Valuation provides the framework for assessing whether a proposed transaction price is reasonable.
RelatedEBITDA·Enterprise Value·Equity Value·Valuation Multiple
Why it matters — Buy-side advice helps an acquirer assess opportunities from the buyer's perspective and maintain discipline throughout the process.
RelatedAcquisition·Target Company·Financial Buyer·Strategic Buyer
C
Why it matters — It affects financial risk, funding capacity and the economics of an acquisition.
RelatedAcquisition Financing·Debt·Equity·Private Equity
Why it matters — A carve-out can require additional work to separate systems, contracts, employees and services from the parent company.
RelatedAsset Purchase·Due Diligence·Transition Services Agreement·Integration
Why it matters — It helps establish the relationship between Enterprise Value and the amount ultimately attributable to shareholders.
RelatedEnterprise Value·Equity Value·Net Debt·Purchase Price
Why it matters — It can trigger contractual rights, consent requirements or termination provisions.
RelatedChange of Control Clause·Due Diligence·Consent·Closing
Why it matters — Such clauses can affect whether important contracts remain in place following an acquisition.
RelatedChange of Control·Due Diligence·Consent·Closing
Why it matters — Closing marks the completion of the acquisition and the fulfilment of the agreed closing conditions.
RelatedSigning·Closing Conditions·Share Purchase Agreement
Why it matters — They can result in a post-closing adjustment to the purchase price.
RelatedPost-Closing Adjustment·Net Debt·Working Capital Adjustment·Locked Box
Why it matters — The headline purchase price may not represent the amount received by the seller at closing.
RelatedTotal Consideration·Earnout·Deferred Consideration·Purchase Price
Why it matters — A corporate buyer may be able to generate synergies that influence the value it places on an acquisition.
RelatedStrategic Buyer·Financial Buyer·Synergies·Acquisition
D
Why it matters — It provides a controlled environment for sharing the information buyers need to evaluate the transaction.
RelatedDue Diligence·Information Memorandum·NDA·Vendor Due Diligence
Why it matters — Two offers with the same headline price can have very different economic value depending on their structure.
RelatedEarnout·Deferred Consideration·Seller Financing·Rollover Equity
Why it matters — It affects the timing and certainty of the seller's proceeds.
RelatedEarnout·Seller Financing·Total Consideration·Deal Structure
Why it matters — It allows the buyer to verify information, identify risks and determine whether the agreed terms remain appropriate.
RelatedData Room·Quality of Earnings·Vendor Due Diligence·Representations & Warranties
E
Why it matters — Earnouts can bridge differences between buyer and seller expectations about future performance, but they also introduce post-closing complexity.
RelatedDeferred Consideration·Deal Structure·Total Consideration·Seller Financing
Why it matters — EBITDA is frequently used in valuation multiples, making the definition and sustainability of earnings important.
RelatedAdjusted EBITDA·Normalised EBITDA·EV / EBITDA Multiple·Enterprise Value
Why it matters — Enterprise Value is commonly used as the starting point for calculating valuation multiples and determining Equity Value.
Why it matters — Equity Value is generally the amount relevant to the shareholders' proceeds from a transaction.
RelatedEnterprise Value·Net Debt·Purchase Price·Share Purchase
Why it matters — It can protect the buyer against certain post-closing risks while delaying receipt of part of the seller's proceeds.
RelatedHoldback·Indemnification·W&I Insurance·Representations & Warranties
Why it matters — It is one of the most commonly used valuation measures in M&A and allows companies and transactions to be compared on a consistent basis.
RelatedEBITDA·Enterprise Value·Valuation Multiple·Business Valuation
Why it matters — Granting exclusivity restricts the seller's ability to pursue alternatives while the buyer invests in the transaction process.
Why it matters — Its length can significantly affect the seller's negotiating position and transaction flexibility.
RelatedExclusivity·Letter of Intent·Break Fee
Why it matters — Considering an exit strategy in advance gives an owner more time to prepare the business and evaluate alternatives.
RelatedSell-Side·Management Buyout·Strategic Buyer·Business Valuation
F
Why it matters — It can provide additional support for boards or shareholders evaluating a proposed transaction.
RelatedBusiness Valuation·Transaction Value·Independent Valuation
Why it matters — Financial buyers assess acquisitions with particular attention to cash generation, growth, financing and future exit value.
RelatedPrivate Equity·Strategic Buyer·Platform Company·Acquisition Financing
Why it matters — The event triggering the fee and the basis on which it is calculated should be clearly defined.
RelatedSuccess Fee·Buy-Side·Sell-Side·Advisory Fee
Why it matters — High founder dependency can affect buyer confidence, valuation and post-closing continuity.
G
Why it matters — Goodwill can represent a significant component of the value attributed to an established business.
RelatedEnterprise Value·Purchase Price Allocation·Intangible Assets
H
Why it matters — It provides a framework for negotiations before definitive legal agreements are prepared.
RelatedLetter of Intent·Exclusivity·Deal Structure·Share Purchase Agreement
Why it matters — It affects the timing and certainty of the seller's proceeds.
I
Why it matters — Indemnification provisions determine how certain risks are allocated between buyer and seller after closing.
RelatedRepresentations & Warranties·Escrow·W&I Insurance
Why it matters — It provides qualified buyers with a structured overview of the opportunity.
RelatedBlind Teaser·Data Room·NDA·Sell-Side
Why it matters — The success of an acquisition depends not only on completing the deal but also on achieving the intended operational and commercial benefits afterwards.
RelatedPost-Merger Integration·Synergies·Transition Services Agreement
Why it matters — It provides a structured basis for approving an acquisition.
RelatedAcquisition·Financial Buyer·Due Diligence·Valuation
J
Why it matters — A joint venture can provide an alternative to a full acquisition when the parties want to cooperate without transferring complete ownership.
RelatedAcquisition·Merger·Strategic Investment
K
Why it matters — Buyers assess this risk because the loss of a key individual can affect revenue, client relationships or operations.
RelatedFounder Dependency·Owner Dependency·Non-Compete
L
Why it matters — It marks the transition from initial discussions to a more defined transaction process.
RelatedHeads of Terms·Exclusivity·Due Diligence·Share Purchase Agreement
Why it matters — It provides price certainty but places particular importance on the accuracy of the financial information at the locked-box date.
RelatedCompletion Accounts·Leakage·Net Debt·Working Capital
M
Why it matters — An MBI can provide an alternative exit route for an owner while bringing new management into the business.
Why it matters — An MBO can provide continuity for the business while allowing the existing owner to exit.
RelatedManagement Buy-In·Private Equity·Seller Financing
Why it matters — It can affect the certainty of a transaction during the period between signing and closing.
Why it matters — A merger differs from a straightforward acquisition and may involve different ownership and governance arrangements.
Why it matters — Multiples provide a convenient basis for comparing valuations, although the appropriate multiple varies by company and transaction.
RelatedEV / EBITDA Multiple·Enterprise Value·Valuation Multiple
N
Why it matters — It establishes confidentiality protections before detailed information about the business is disclosed.
Why it matters — Net Debt is commonly used to bridge Enterprise Value and Equity Value.
RelatedEnterprise Value·Equity Value·Cash-Free, Debt-Free·Completion Accounts
Why it matters — The amount of working capital delivered at closing can affect the final purchase price.
RelatedWorking Capital Adjustment·Working Capital Peg·Completion Accounts
Why it matters — Buyers may seek protection against the seller immediately competing with the business they have acquired.
RelatedKey Person Risk·Representations & Warranties·Share Purchase Agreement
Why it matters — It aims to provide a clearer view of sustainable operating profitability.
RelatedEBITDA·Adjusted EBITDA·Quality of Earnings·EV / EBITDA Multiple
O
Why it matters — Price is only one element of an offer; structure, timing, conditions and risk allocation can materially affect its attractiveness.
RelatedBinding Offer·Letter of Intent·Consideration·Deal Structure
Why it matters — High owner dependency can affect valuation, buyer confidence and the transferability of the business.
P
Why it matters — Platform companies can be important potential buyers for smaller and mid-sized businesses.
RelatedAdd-on Acquisition·Roll-up·Private Equity·Strategic Buyer
Why it matters — It can change the final amount paid by the buyer and received by the seller.
RelatedCompletion Accounts·Working Capital Adjustment·Net Debt
Why it matters — Integration determines how effectively the buyer can realise the strategic and financial benefits expected from the acquisition.
Why it matters — Private equity firms can be both direct buyers and financial sponsors supporting acquisitions.
RelatedFinancial Buyer·Platform Company·Add-on Acquisition·Acquisition Financing
Why it matters — The headline purchase price may not equal the cash received by the seller at closing.
RelatedConsideration·Enterprise Value·Equity Value·Total Consideration
Why it matters — It affects the accounting treatment of the acquisition and the value attributed to different acquired assets.
RelatedGoodwill·Intangible Assets·Enterprise Value
Q
Why it matters — It can identify adjustments or risks affecting the sustainable earnings figure used in valuation.
RelatedEBITDA·Adjusted EBITDA·Due Diligence·Vendor Due Diligence
R
Why it matters — They provide the buyer with contractual protection if specified statements prove inaccurate.
RelatedIndemnification·Share Purchase Agreement·W&I Insurance
Why it matters — Roll-up strategies can create active acquisition markets and influence the types of buyers seeking businesses.
Why it matters — It allows the seller to participate in future value creation while reducing the cash paid at closing.
Why it matters — Run-rate figures can illustrate recent performance but may not reflect seasonality or future changes.
RelatedEBITDA·Forecast·Management Accounts
S
Why it matters — It reduces the buyer's upfront funding requirement but leaves the seller with financial exposure after closing.
RelatedDeferred Consideration·Acquisition Financing·Deal Structure
Why it matters — Signing and Closing may occur on different dates, with specific conditions needing to be satisfied before completion.
RelatedClosing·Closing Conditions·Share Purchase Agreement
Why it matters — Strategic value can influence what a buyer is willing to pay and how an acquisition is structured.
RelatedFinancial Buyer·Corporate Buyer·Synergies·Acquisition
Why it matters — The agreement should clearly define what constitutes a successful transaction and how the fee is calculated.
RelatedFinder's Fee·Advisory Fee·Commission
Why it matters — Synergies can explain why a strategic buyer may value a company differently from its standalone value.
RelatedStrategic Buyer·Integration·Add-on Acquisition·Roll-up
T
Why it matters — The target is the subject of the buyer's strategic assessment, valuation and due diligence.
RelatedAcquisition·Buy-Side·Due Diligence
Why it matters — Comparing only the upfront payment can give a misleading picture of competing offers.
RelatedConsideration·Earnout·Deferred Consideration·Purchase Price
Why it matters — Transaction value needs to be understood in the context of Enterprise Value, Equity Value, debt, cash and other adjustments.
RelatedEnterprise Value·Equity Value·Purchase Price·Total Consideration
Why it matters — It can provide continuity where systems, infrastructure or other services cannot be transferred immediately.
RelatedCarve-out·Integration·Closing
V
Why it matters — Multiples are widely used in M&A valuation, but the appropriate multiple depends on the company's characteristics and market conditions.
RelatedEV / EBITDA Multiple·EBITDA·Enterprise Value·Business Valuation
Why it matters — It can help a seller prepare for buyer scrutiny and reduce surprises during the transaction process.
RelatedDue Diligence·Quality of Earnings·Data Room·Sell-Side
W
Why it matters — W&I insurance can reduce direct post-closing exposure for buyer and seller and may help resolve negotiations over risk allocation.
RelatedRepresentations & Warranties·Indemnification·Escrow·Holdback
Why it matters — Delivering materially more or less working capital than agreed can increase or decrease the final purchase price.
RelatedNet Working Capital·Working Capital Peg·Completion Accounts
Why it matters — It establishes the benchmark used to calculate a working capital adjustment.
RelatedWorking Capital Adjustment·Net Working Capital·Completion Accounts