Closed Transaction - Purchase Price Reconciliation / Clearing
Hi everyone,
Let's assume that buyer A buys from seller B an asset C. Let's assume that A and B have agreed to the following EV bridge:
EV: 1,000 Financial Debt: 300 Unfunded Pensions 100 Excess cash: 100
This would lead us to a simplified equity valuation of 700. Now the deal is signed.
How would the purchase price get reconciled?
- Would A simply transfer the 700 to B?
- Would A simply transfer 300 to the current lender (e.g., funded by new debt raised for the deal)?
Thanks a lot in advance for any help!
Transactions are typically done on a cash free, debt free basis, where it is up to the seller to keep all excess cash and pay off the debt, using the proceeds from the deal, at close. Any new debt existing in NewCo probably comes from the financing for the deal.
Reprehenderit aliquid qui id quidem quo est. Corporis dolore sequi ducimus iure. Fugiat eveniet magni et necessitatibus eius. Officiis sint nemo quo sint. Ducimus id sint nisi voluptas dolorem ut. Dolor delectus et ut ducimus corrupti assumenda consequuntur.
Placeat modi quia in quas qui eaque aperiam. Impedit consequuntur velit magni odit accusantium. Ullam aut commodi corporis blanditiis. Voluptates voluptas repellendus praesentium maiores magnam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...