Corporate Finance woordenlijst

An earn-out is a financial arrangement used in M&A transactions where the seller receives additional compensation based on the future performance of the acquired business. This contingent payment is typically tied to achieving specific financial targets or milestones over a defined period post-acquisition.

EBITDA is earnings before interest, taxes, depreciation and amortization, a non-GAAP performance measure used to compare operating results before financing and selected non-cash charges.

An EBITDA multiple expresses enterprise value relative to a defined EBITDA measure and period, commonly used to compare businesses or derive an indicative enterprise value.

Economies of scale occur when average cost per unit declines as sustainable output grows because resources are spread further or processes become more efficient.

Enterprise value is the value attributed to a company's core operations for all capital providers before allocating value through net debt and other agreed claims.

An enterprise-to-equity value bridge reconciles operating business value to equity value by deducting or adding agreed financing, debt-like and non-operating items.

Equity value is the value attributable to a company’s specified equity holders after debt and other senior claims and adjustments are reflected.

In Mergers and Acquisitions (M&A) transactions, escrow is a financial arrangement where a portion of the purchase price is held by a neutral third party. This ensures that funds are available to address any claims, indemnities, or post-closing adjustments that may arise. The escrow account holds the funds until all specified conditions are met, protecting both the buyer and the seller from potential risks and ensuring compliance with the agreed terms.

An EV/Revenue multiple expresses enterprise value relative to a defined revenue measure and period, often used when earnings are negative or margins differ materially.

Exclusivity in Mergers and Acquisitions (M&A) transactions refers to an agreement where the seller grants the buyer an exclusive right to negotiate the deal for a specified period. During this exclusivity period, the seller agrees not to entertain offers or engage in negotiations with other potential buyers. This arrangement ensures that the buyer can conduct due diligence and finalize the terms of the transaction without the risk of competing bids.

An exit strategy is a planned approach to selling ownership in a business to achieve a financial return. It outlines how investors and owners will exit the investment, converting ownership stakes into cash or other assets.