Questions answered
- How do I compare two offers?
- What does an earn-out change?
- Which risks remain after closing?
An offer is not one number
Two offers with the same headline price can create very different outcomes if one pays all cash at close while the other depends on an earn-out, future financing, extensive seller protection or a mandatory post-close role.
Compare economics, certainty, conditions, risk and future role. This playbook does not choose an offer for the seller.
1. Cash at close
What amount is payable once closing conditions are met? In which currency, through which bank, and after which debt or adjustment items?
2. Deferred consideration
Deferred price creates buyer credit risk. Understand maturity, interest, security, ranking, default events and future payment capacity.
3. Earn-out
Earn-outs can bridge valuation views but create governance risk: who controls the decisions that determine the metric? EBITDA/revenue definitions, accounting policies, CAPEX, transfer pricing, management and information rights matter.
4. Seller financing
Seller finance can enable the structure while extending exposure. Amount, interest, maturity, security, subordination, covenants and acceleration need professional treatment.
5. Net debt and working capital
Enterprise-value offers may be adjusted for debt/cash and working-capital levels. Without clear definitions, the agreed headline price may move materially at completion.
6. Warranties, indemnities and escrow
A higher offer may transfer more post-close risk to the seller through warranties, holdbacks, partner escrow, caps/baskets or specific indemnities. Compare risk, not only the front-page figure.
7. Exclusivity
Exclusivity protects a buyer investing in diligence but removes seller options. Scope, duration, obligations, exceptions and termination consequences should be explicit.
8. Post-close role
Transition, consultancy, temporary management, rollover equity or non-compete obligations can materially change personal economics. They are not footnotes.