Section 338(h)(10) Election Explained for Business Sellers
Section 338(h)(10) Election Explained for Business Sellers Section 338(h)(10) election in 2026 converts a stock sale to a deemed asset sale for tax purposes, giving buyers step-up in basis while preserving seller-friendly stock-sale mechanics. Eligibility: target must be an S-corp or C-corp subsidiary in a consolidated group. Day 1/day 2 mechanics: purchase price allocated to […]
Understand the Net Working Capital Peg in M&A Deals in 2026: How the Peg Is Calculated and Trued-Up
Understand the Net Working Capital Peg in M&A Deals in 2026: How the Peg Is Calculated and Trued-Up Understanding the net working capital peg in M&A deals in 2026 is the difference between clean close and a 5-15% purchase price haircut. The peg (target working capital delivered at close) is calculated using TTM, 3-month rolling, […]
How to Value a Rapid Growth Business in 2026: Forward EBITDA and Rule of 40
How to Value a Rapid Growth Business in 2026: Forward EBITDA and Rule of 40 Valuing a rapid growth business in 2026 shifts from TTM EBITDA to forward EBITDA methodology and Rule of 40 framing (growth rate plus EBITDA margin). 30%+ growth with Rule of 40 above 40 commands premium multiples: 10-15x forward EBITDA for […]
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 A buy-side quality of earnings review is the financial diligence work a buyer commissions to validate the seller-quoted EBITDA before signing definitive documents. The QoE provider rebuilds the target’s trailing twelve-month earnings from the general ledger, tests revenue recognition cohort by cohort, normalizes working capital, […]
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 in 2026: 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? The Real Estate Factor Reshapes the Whole Deal Quick Answer The real estate factor in a business sale is the decision about whether owned property goes with the operating business, stays with the seller through a sale leaseback, or is sold to a separate buyer. For vehicle services, healthcare offices, and specialty […]
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 200+ 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 […]