Section 338h10 Election Explained for Business Sellers
Section 338h10 Election Explained for Business Sellers Quick Answer A Section 338(h)(10) election recharacterizes a stock purchase as an asset purchase for federal tax purposes, allowing the buyer to step up asset basis and accelerate depreciation while potentially preserving capital gains treatment for the seller. The election requires the buyer to acquire at least 80 […]
Understand the Net Working Capital Peg in M&A Deals
Understand the Net Working Capital Peg in M&A Deals Quick Answer A net working capital peg is a closing-day benchmark that ties the buyer’s final purchase price to the actual current assets minus current liabilities (excluding cash and debt) delivered at closing. The peg, typically negotiated in the LOI, creates a dollar-for-dollar adjustment mechanism: if […]
How to Value a Business with Rapid Growth
How to Value a Business with Rapid Growth Quick Answer High-growth businesses typically command valuations of 4x to 8x SDE or 6x to 12x EBITDA, significantly higher than slower-growth peers, because buyers pay primarily for future cash flow predictability rather than current earnings. Valuation hinges on three factors: the durability and repeatability of growth, the […]
What Stays and What Goes in Working Capital for Business Sales
What Stays and What Goes in Working Capital for Business Sales Quick Answer Working capital in a business sale includes current assets like cash, accounts receivable, and inventory that transfer at closing, while the seller typically retains reserve funds and personal assets unrelated to operations. The purchase agreement should define a net working capital target […]
Quality of Earnings: What Buyers Need to Know
Quality of Earnings: What Buyers Need to Know Quick Answer Quality of Earnings is a financial review that validates a company’s true earning power by stripping out one-time gains, accounting adjustments, and non-recurring items to show buyers reliable EBITDA and sustainable cash flow. This analysis typically costs between 35,000 and 150,000 dollars depending on complexity […]
Valuation Multiples: Unlocking the Key to Business Valuation
Valuation Multiples: Unlocking the Key to Business Valuation Quick Answer Valuation multiples are ratios that link a company’s enterprise value to a financial metric like EBITDA, revenue, or earnings, enabling fast market-based comparisons across similar businesses. The most common multiples are EV/EBITDA, EV/Revenue, and P/E ratio, with EV/EBITDA favored for founder-owned businesses because it normalizes […]
Accountant vs M&A Advisor: Why They Value Your Business Differently
Accountants apply book value and asset-based methods; M&A advisors apply market multiples and DCF. Why the same business gets 2 different numbers and which one buyers actually care about.
Selling Your Business? Consider the Real Estate Factor
Selling Your Business? Consider the Real Estate Factor Quick Answer Real estate decisions like lease terms, personal guarantees, and property ownership can significantly impact your business sale value and buyer interest. A short-term lease or personal guarantee obligation may reduce purchase offers and slow negotiations, while long-term leases with favorable renewal options and assignability can […]
Goodwill in Business Valuation (2026): What It Means for Sellers
Goodwill in Business Valuation (2026): Personal vs Enterprise & What It Means Christoph Totter · Managing Partner, CT Acquisitions Buy-side M&A across 76+ active capital partners · Intangible asset valuation: goodwill, IP, customer lists · Updated June 6, 2026 Goodwill in business valuation is the premium a buyer pays above the fair market value of […]