Our M&A Glossary is a valuable resource for anyone seeking to understand the world of corporate transactions, providing clear definitions and explanations of key terms to guide both industry veterans and newcomers through the complexities of mergers, acquisitions, and related topics.
The glossary is organized alphabetically, allowing you to search for a specific term directly in the search field and access its definition instantly.
A 100-day plan is a roadmap for the initial period following an M&A deal. It outlines the key tasks and goals to be achieved in the first 100 days post-closing.
This refers to the enhancement of per share metrics following a transaction, typically after the issuance of additional shares.
This is an accounting approach where income and expenses are recognized when the business first acquires the right to receive the income or the obligation to pay the expense, regardless of when payment is received or remitted.
This is the entity that is buying another company in an acquisition.
An acquisition is a corporate action where one company purchases most or all of another company’s shares to gain control of that company. Acquisitions are typically made as part of a company’s growth strategy.
These are adjustments made to the normalized income statement to provide a more accurate depiction of a company’s earnings. They generally include non-recurring expenses and owner perquisites.
Agile methodology is an iterative and collaborative approach to project management and software development. It emphasizes flexibility, adaptability, and delivering value incrementally through short development cycles known as sprints.
In an asset sale, the purchase price must be allocated to tangible and intangible assets and goodwill. The buyer and seller agree on and report the same purchase price allocation to tax authorities.
This is the process of merging one or more companies into a new entity, with none of the original companies remaining and a completely new legal entity being formed.
Amortization is the process of gradually reducing a debt through regular payments over a period of time. In business, it can also refer to the spreading out of capital expenses for intangible assets over a specific period of time (usually over the asset’s useful life).
An angel investor is an individual who provides capital to startups or early-stage companies in exchange for equity ownership. Angel investors often have experience in the industry and can provide not only financial support but also mentorship and industry connections.
Antitrust laws are regulations that promote competition and limit monopoly by regulating the conduct and transactions of businesses.
This term refers to the process of determining the value of a business or asset.
These are provisions in an M&A agreement that require disputes to be resolved through arbitration rather than through court litigation.
Artificial Intelligence (AI) refers to the simulation of human intelligence in machines that are programmed to think and learn like humans. AI technologies enable automation, predictive analysis, natural language processing, and other advanced capabilities.
An asset acquisition is a transaction in which a company acquires the assets of another company, such as equipment, inventory, intellectual property, or customer contracts. It allows the buyer to select specific assets while excluding liabilities or obligations.
This is a method of determining a business’s value by using one or more methods based on the value of the business’s assets net of liabilities.
This is a type of deal where the acquirer purchases only the assets of the target company, not its shares.
An asset purchase involves buying the individual assets and liabilities of a business. It allows the buyer to select specific assets and avoid unwanted liabilities.
An APA is a legal agreement between a buyer and a seller that finalizes terms and conditions related to the purchase and sale of a company’s assets.
This is a sale/purchase of certain business assets, both tangible and intangible, and often some liabilities, leaving the seller with the corporate entity and possibly some remaining assets and liabilities.
These are commercial lenders who are willing to take on more risk than commercial banks by lending against fixed assets, accounts receivable, and inventory and being subordinate to commercial banks.
An auction is a type of business sale process that involves competitive bidding.
These are various types of financial examinations that can occur during an M&A transaction, each with different levels of thoroughness and assurance.
This occurs when a company acquires a target that produces the raw material or the ancillaries used by the acquirer, with the intention of ensuring a continuous supply of high-quality raw materials at a fair price.
This is a statement of the financial status of a business on a certain date. It summarizes a company’s assets, liabilities, and owners’ equity.
This is a promise from a bank or other lending institution that if a particular borrower defaults on a loan, the bank will cover the loss.
In a purchase agreement, this is the minimum loss a buyer must suffer before they can recover damages under the indemnification provisions.
BATNA stands for Best Alternative to a Negotiated Agreement. It refers to the alternative course of action a party can take if the current negotiation fails to reach a satisfactory agreement. Understanding and evaluating the BATNA helps in assessing the strength of one’s position and making informed decisions during negotiations.
Big data refers to large and complex sets of structured and unstructured data that cannot be easily managed or processed by traditional data processing applications. It involves analyzing and extracting insights from vast amounts of data to drive decision-making and innovation.
Blockchain is a decentralized and distributed digital ledger that records transactions across multiple computers. It provides transparency, security, and immutability, making it suitable for applications such as cryptocurrency and supply chain management.
This refers to the portion of a claimed value or requested price
This is the figure derived by deducting balance sheet liabilities from assets.
This is one of the less ideal reasons for a merger. It occurs when the target’s P/E ratio is lower than the acquirer’s P/E ratio, resulting in an increase in the acquirer’s EPS after the merger. However, this is purely a numerical phenomenon and does not create any value or synergies.
This is a penalty set in takeover agreements, to be paid if the target backs out of a deal to sell itself.
Bridge financing, also known as bridge loans or gap financing, is a short-term financing option used to bridge the gap between immediate financial needs and a more permanent or long-term financing solution. It provides temporary funding until a more comprehensive funding source is secured.
This is a temporary loan to cover the financing shortfall of the acquisition until permanent funding is available.
This is a document confirming that certain representations and warranties are true as of the closing date of a transaction.
This is a law that regulates the transfer of business assets to prevent sellers from receiving sale proceeds before creditors are paid.
Business continuity in post-M&A integration involves ensuring that critical business functions continue to operate during and after the integration process.
A buy and build strategy involves acquiring a platform company and then making additional acquisitions to consolidate and grow the platform.
This is a corporation whose profits are taxed separate from its owners under subchapter C of the Internal Revenue Code.
In a purchase agreement, this is the maximum amount of damages a buyer can recover from the seller under the indemnification provisions.
This is an abbreviation of Capital Expenditure.
This is an amount spent to acquire or improve long-term assets such as property, plant, and equipment.
CapEx is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land.
Capital structure refers to the mix of debt and equity financing that a company uses to fund its operations and growth.
This is a conversion of a single period stream of benefits into value.
This is to classify a cost as a long-term investment, rather than expensing it to current operations.
A carve-out is a deal structure where a company sells a minority interest in a subsidiary to outside investors, creating a new standalone company.
Stay ahead of the game and join our exclusive community of industry experts by subscribing to our newsletter today! We promise that we will never spam you!
We buy, transform and grow well-known, high-margin brands into digital success stories.
Located in the heart of Switzerland, our private investment firm combines local expertise with a strong international focus, primarily on the DACH region, while leveraging our deep global roots for successful M&A transactions.
English 
Deutsch