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Jan 5, 2016 · 5 Jan 2016. The concept of a “cash free/debt free” deal is very common in M&A transactions, but what does it actually mean? On the face of it, it is a fairly simple concept. The buyer purchases the business and its assets at completion, and the seller is left with the cash and debt. The purchase price will therefore be the agreed price ...
In M&A practice, discounted cash flow methods and approaches using multiples are the most widely applied methodologies. In terms of multiples valuations, EBITDA- and EBIT-multiples are by far the most common multiples used. EBITDA and EBIT are profitability indicators unaffected by the financing structure of a company.
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