Between the Spreadsheets Issue 7: Understanding Cash-Free/Debt-Free Transactions – with Mazars Healthcare Transaction Advisory Services Practice

April 28, 2021

The acquisition of most businesses is negotiated on a cash-free/debt-free basis. This typically means that the buyer acquires the business and its related assets, and the seller is left with the cash and debt… It appears to be a simple concept. Most often, however, the specifics of cash-free/debt-free are not defined within the initial letter of intent (“LOI”).

Many times, during the diligence process, both the buyer and the seller identify potential items that will need to be further negotiated because they could be included or excluded by either party as a cash-free/debt-free item. Examples of such items from a cash perspective include the treatment of outstanding checks, held checks, petty cash, credit cards in transit, restricted cash, and escrow proceeds.

Read the full article here.

Mazars’ Healthcare Transaction Advisory Services Team

Wayne Pryor, Partner | Wayne.Pryor@MazarsUSA.com

Richard Koppel, Director| Richard.Koppel@MazarsUSA.com

 

 



Disclaimer of Liability

The information provided here is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation.

Mazars USA LLP is an independent member firm of Mazars Group.


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