Earn-outs are pricing structures in M&A transactions, set when the vendor and purchaser cannot agree on a valuation for the business being bought or sold. An earn-out bridges the gap between the two valuations and requires the sellers ‘earn’ part of the purchase price based on how well the business performs after the sale.The seller [...]
The authors suggestions for M&A strategies that create value reflect the McKinsey acquisitions work with companies. According to their experience: in M&A, acquirers in the most successful deals have specific, well-articulated value creation ideas going in. The strategic rationale for an acquisition that creates value typically conforms to at least one of the following six archetypes: 1 [...]
M&A activity represents globally more than US $ 3 tn every year, however research shows that between 50% and 85% of the transactions carried out do not reach the objectives that were initially established to acquire a business. To try to explain the reasons for these high rates of "failure" in the M&A market, professors [...]
In the second quarter of 2017, Mergermarket surveyed senior executives from 170 corporates and 60 PE firms based in Europe about their expectations for the European M&A market in the year 2018. All respondents have been involved in an M&A transaction over the past two years. The results were presented in the 5th edition of [...]
Trying to define what a family office is, we are not likely to ever find a uniform definition that encompasses everyone’s notions of what family offices should do or entail. In reality, family offices and the families they serve are much more multifaceted and diverse in their typology. Origins and evolution of family offices In [...]
The need for growth has led companies to identify and acquire disruptive opportunities and protect against the rapid innovation faced in many industries. Firms established in the market have confronted the threat of becoming obsolete by opening their innovation strategy to increase their exchanges with the startups ecosystem. Collaboration between corporations and startups has become [...]
Planning and preparing the sale of a business, favors more robust sale processes and reduces the likelihood that potential buyers will be distracted by questions and issues that could easily have been foreseen. Here is a list of some of the actions that potential sellers should consider before embarking on a sales process: 1.Estate planning [...]
There are situations in which, instead of a business valuation, a brand valuation is needed; In these cases, it is difficult to define what the brand is, what portion of the cash flows generated by the company are due to the brand or how much a company is valued without its brand. There are different [...]
Valuation of a pre-revenue company is often one of the first points of contention that must be negotiated between angels and entrepreneurs due to the fact that there is no agreed upon standards for startups and that the goals of the negotiating parties are opposite since entrepreneurs want the value to be as high as [...]
EBITDA (Earnings before interests, taxes, depreciation and amortization) is equivalent to Gross Operating Income (in Spanish, Resultado Bruto de Explotación) because it reflects the excess of operating income over expenses related to those revenues in a period of time and, it is commonly used as a multiple to valuing companies. It is a measure that normally is [...]
