Tax due diligence is not just an accounting exercise, it is a valuation issue that can materially change what a privately held business is worth, what a buyer is willing to pay, and how deal terms are structured. When buyers review a target company, they look closely for tax exposures that could reduce cash flow, […]
Legal due diligence is the buyer’s structured review of a target company’s corporate records, contracts, intellectual property, litigation history, and regulatory compliance, but for valuation purposes it is more than a box-checking exercise. Findings in legal diligence can materially affect fair market value, purchase price negotiations, deal structure, and the valuation adjustments a buyer or […]
Normalizing adjustments, often called add-backs, are one of the most scrutinized parts of a privately held business valuation. They can meaningfully change EBITDA, SDE, cash flow, and ultimately indication of value, but only if they are supportable under diligence. In practice, buyers and appraisers will accept only those adjustments that are clearly non-recurring, non-operational, or […]
When a business owner is preparing for a sale, the most effective way to protect value is often to address buyer diligence before it starts. A sell-side quality of earnings, or sell-side QofE, gives the seller an independent, valuation-focused view of sustainable earnings, working capital, and normalizing adjustments, which helps support a higher and better-informed […]
A Quality of Earnings (QofE) report is one of the most important diligence tools in a private company transaction because it tests whether reported earnings truly reflect the cash-flowing performance a buyer is valuing. For business owners, the question is not just whether the financial statements are accurate, but whether EBITDA, SDE, and revenue are […]
In business valuation, the findings that matter most are often the ones that stop a transaction before it closes. Customer concentration, weak quality of earnings, unresolved legal exposure, and other diligence red flags can lower indicated value, delay a deal, or eliminate buyer interest altogether. For owners of privately held U.S. businesses, these issues are […]
Working capital in an M&A transaction often looks like a bookkeeping detail, but for valuation purposes it can quietly shift real dollars between buyer and seller. The working capital peg, the closing true-up, and the disputes that follow are all about one question, how much operating liquidity must remain in the business at closing for […]
Seller financing can be a practical way to bridge valuation gaps in small business sales, but it also changes how buyers and sellers should think about risk, price, and fair market value. In a business valuation context, seller notes are not just a deal term, they are part of the economics of the transaction, and […]
Earnouts can bridge a valuation gap in a business sale, but only if they are structured around measurable, independently verifiable performance metrics that align with how a privately held company is actually valued. From a valuation perspective, an earnout is not just a deal term, it is a risk allocation tool that affects purchase price, […]
For privately held companies, the choice between an asset sale and a stock sale affects far more than legal structure. It changes the economic value a buyer is willing to pay, the seller’s after-tax proceeds, the allocation of liabilities, and the way a valuator judges fair market value under real-world deal conditions. In business appraisal, […]