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Purchase price is never the headline number you first hear about. Private deals are typically done on a “cash-free, debt-free” basis and to get to true purchase price or equity value, the parties start with enterprise value and then add cash, subtract indebtedness, subtract transaction expenses and then add or subtract working capital (or some other financial metric). Every one of those concepts is loaded with complexity, adjusts the headline number up or down and is ripe for negotiation. This installment of Dealology walks through the components of purchase price. Also watch our Dealology video on working capital being released in January 2020.