Negotiating Working Capital: Maximizing M&A Valuation
In most M&A transactions, the parties arrive at a purchase price by multiplying the target company’s revenue or earnings before interest, taxes, depreciation, and amortization (EBITDA) by an agreed-upon multiple. While this is generally true, a buyer will also typically require a minimum amount of “working capital” on the balance sheet when the deal closes to ensure there are no immediate liquidity issues. A buyer doesn’t want to pay twice: Once to buy the business and then to have to inject capital post-closing in order to keep the business running.
- How working-capital hurdles provide protection and benefits to both parties in a transaction
- How working-capital hurdles are calculated
How purchase price adjustments are made based on agreed-upon working capital hurdles
Managing Director, Ascento Capital, LLC
Ben Boissevain has 30 years of cross border M&A experience and has senior level global connections in the technology sector. He graduated from NYU Law School and started his career at White & Case. His legal training enables him to handle any aspect of contractual negotiations in M&A and capital raising. He garnered investment banking experience at Erste Bank in Vienna and Barclays Bank in New York.
Mr. Boissevain regularly speaks on panels on the technology sector and corporate finance and has appeared on TV at Fox News and Bloomberg.