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.
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Mazars’ Healthcare Transaction Advisory Services Team
Wayne Pryor, Partner | Wayne.Pryor@MazarsUSA.com
Richard Koppel, Director| Richard.Koppel@MazarsUSA.com