Reference · 46 entries
Glossary
The deal vocabulary, in plain English. Definitions are written for practitioners — short on textbook, long on what actually matters in a process.
A
C
CAC (Customer Acquisition Cost)
Fully loaded sales and marketing cost to win one new customer, over a defined period.
Carve-out
Sale of a discrete business unit out of a larger parent, requiring separation of shared services.
CFIUS
US Committee on Foreign Investment — reviews acquisitions of US businesses by foreign buyers for national-security risk.
CIM (Confidential Information Memorandum)
Sell-side marketing document — the long-form pitch to qualified bidders post-NDA.
Clean Team
Bidder representatives — usually outside advisors — permitted to view competitively sensitive information under restrictions.
Completion Accounts
Post-close balance-sheet exercise that adjusts the purchase price based on closing-date cash, debt, and working capital.
D
Day 1
Closing day — the operational handover from seller to buyer and the start of integration execution.
DCF (Discounted Cash Flow)
Valuation method that discounts projected free cash flows back to present value using WACC.
Disclosure Schedule
Seller annex to the SPA listing exceptions to the reps and warranties.
DPA (Data Processing Agreement)
Contract under Article 28 GDPR governing how a processor handles personal data on a controller's behalf.
E
Earn-out
Contingent purchase-price payments triggered by post-close performance milestones.
EBITDA
Earnings Before Interest, Tax, Depreciation, and Amortisation — the operating-cash-flow proxy most M&A multiples are quoted against.
Enterprise Value (EV)
The total economic value of the business, independent of capital structure.
Escrow
Portion of purchase price held by a third party post-close to backstop seller indemnities.
Exclusivity
Period during which the seller agrees not to negotiate with other bidders — the operational reason the LOI matters.
G
I
L
Letter of Intent (LOI)
Non-binding term sheet that frames the deal — price, structure, exclusivity, and conditions to close.
Locked Box
Closing mechanism where price is fixed at a historical balance-sheet date with no post-close true-up.
LTM (Last Twelve Months)
The trailing twelve-month period, used to ground multiples in actual performance rather than forecast.
LTV (Customer Lifetime Value)
Gross-margin contribution a customer is expected to generate over their full relationship.
M
N
P
Q
R
Redaction
Suppression of confidential strings (PII, customer names, IP) in data-room documents.
Rep & Warranty Insurance (RWI)
Insurance policy that absorbs breach-of-rep claims, allowing sellers to take more cash at close.
Reps & Warranties
Seller statements of fact about the business that, if false, give the buyer a contractual claim.
Rule of 40
Growth rate plus EBITDA margin — the rough composite measure of a SaaS business's health.
S
Signing vs. Closing
Two distinct events: signing the SPA (commitment) and closing the transaction (transfer).
SOC 2
AICPA audit framework attesting to the design (Type I) and operating effectiveness (Type II) of security controls.
Synergies
Revenue or cost benefits attributed to the combined entity that would not exist standalone.
T
Teaser
One- or two-page anonymised summary used to gauge bidder interest before NDA.
Technical Debt
Accumulated shortcuts in code, architecture, or process that compound cost and slow change.
Technology Due Diligence (Tech DD)
Buy-side workstream assessing the target's product, engineering, infrastructure, and technical risk.
TSA (Transitional Services Agreement)
Post-close contract under which the seller continues to provide specified services to the carved-out business.