M&A Insight Term Definitions

Date:

Closing date (Mid-cap transactions) or announcement date (Large-cap transactions)

SIC:

Standard Industrial Classification [ View SIC Codes ]

$ MM:

U.S. $ in MM=millions. Reference is also made to M=thousands of U.S. $ and B=billions of U.S. $

Price:

Equity Price or price paid for the seller’s equity. Over 86% of the M&A Insight transactions are sales of equity or ‘stock sales’. To calculate a Deal Price (or enterprise price), add total debt (Assets less Stockholders’ Equity) to the Equity Price. For ‘asset sales’ (less than 14 percent of the M&A Insight transactions), the price is the amount paid for the portion of the seller’s assets acquired and liabilities assumed.

Assets:

All properties, both tangible and intangible, and claims against others that may be applied to cover the liabilities of a person or business. Assets can include cash, stock, inventories, property rights, and goodwill. M&A Insight displays an organization's total assets at the end of the most recent accounting period

Stockholders’ Equity:

A company's common stock equity as it appears on a balance sheet, equal to total assets minus liabilities, preferred stock, and intangible assets such as goodwill. This is how much the company would have left over in assets if it went out of business immediately. Since companies are usually expected to grow and generate more profits in the future, most companies end up being worth far more in the marketplace than their stockholders' equity would suggest. For this reason, stockholders' equity is of more interest to value investors than growth investors (also called book value). M&A Insight displays an organization's Stockholders’ equity or net worth at the end of the most recent accounting period

Revenue:

Total income generated through sale of goods or rendering of services (also called Sales) for the most recent accounting period. If the seller operates an obviously seasonal business, total revenue is for a 12-month period

Net Income (Loss):

Net income (or loss) is after-tax income for most corporations. However, for partnerships, limited liability companies, and Subchapter-S corporations, net income (loss) is before income taxes

Cash Flow:

M&A Insight presents ‘cash flow from operations’ – net income (loss) after tax + depreciation and amortization +/- changes in working capital. The M&A Insight database has provided cash flow data for large-cap transactions since the beginning of 2003.

EBITDA:

Earnings Before Interest, Taxes, Depreciation and Amortization. This is an indicator of a company's profitability that is watched by investors (especially in leveraged buyouts). EBITDA can be calculated by subtracting the cost of goods sold (excluding depreciation and amortization) plus selling, general and administrative costs from revenues. The M&A Insight database has provided EBITDA data for mid-cap transactions since 2000.