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Earn-out (debtor warrant)
Part of the purchase price is linked to the acquired company’s future earnings development.
Abbreviation for Earnings Before Interest and Taxes. In Germany, also known as “operating profit/loss”.
Abbreviation for Earnings Before Interest, Taxes, Depreciation and Amortization. In Germany, often known as “operating result”.
Ratio of the effective purchase prices for the business shares for the investment company in comparison to that for the management. If the private equity company pays € 100 million for 90% of the shares and the management €5 million for 10 % of the shares this results in an envy ratio of 2.22.
Financing, in particular for non-listed companies. As a rule companies with strong growth are equity financed. Other equity financing objectives may be the regulation of a company successor or restructuring. With equity financing the outside investor provides the company with equity (and usually also shareholders’ loans) and thus assumes an entrepreneurial risk. In return he receives shares in the company. Equity financing thus means the provision of risk capital (equity capital or also venture capital) by private equity companies, venture capital companies and/or mezzanine investors, as well as business angels. The provision of such capital is also dependent on the current development phase of the company seeking capital.
Possibility for proceeds participation for external creditors, usually through participation upon exit, e.g. through a partial conversion of liability into equity capital or the purchase of equity capital at preferential conditions.
Disposal of a participation or stake in a company by the investor. Exit possibilities: (1) Going public (2) Secondary purchase (3) Trade sale (4) Buy-back.