12 questions to ask any acquirer, plus a side-by-side offer comparison
| # | Question | Their answer |
|---|---|---|
| 1 | Would we be a platform or an add-on? | |
| 2 | What is the price in dollars, and on which earnings number (SDE, EBITDA, adjusted how)? | |
| 3 | How much is cash at close, rollover equity, seller note and earn-out? | |
| 4 | How is rollover equity valued, and when and how can I sell it? | |
| 5 | What working capital target is assumed? | |
| 6 | How much goes into escrow or holdback, and for how long? | |
| 7 | Asset or stock purchase, and what purchase-price allocation do you propose? | |
| 8 | What role do you expect me to play, for how long, at what pay? | |
| 9 | Non-compete length and territory? | |
| 10 | What happens to my brand, my people's pay and benefits, and my customers? | |
| 11 | Who owns you, when did they invest, and when do they plan to sell? | |
| 12 | How many deals like this have you closed in the last 12 months, and can I speak to two sellers? |
| Term | Offer A | Offer B | Offer C |
|---|---|---|---|
| Buyer | |||
| Headline price | |||
| Earnings basis and multiple | |||
| Cash at close | |||
| Seller note (rate, term) | |||
| Earn-out (target, period) | |||
| Rollover equity (% and terms) | |||
| Escrow / holdback | |||
| Working capital target | |||
| Asset or stock sale | |||
| Your role, term and pay | |||
| Non-compete | |||
| GUARANTEED CASH (cash at close - escrow) | |||
| Estimated after-tax proceeds |
Compare offers on guaranteed cash and certainty of closing, not headline price. General information, not legal, tax or investment advice - have an M&A attorney and CPA review any LOI before you sign.
Free template from TradeExit Guide. Edit freely for your business.