Course · Act II: Due Diligence · Act II case study
Due diligence: repricing a buyout
Case: rebuild EBITDA and net debt from the findings, re-price the buyout at the same multiple, rebuild sources and uses, and see what overpaying would have done to the return.
Key terms
- Price chip
- A cut to the agreed price after due diligence, usually the same multiple applied to the corrected numbers.
- Escrow
- Part of the price held by a neutral agent after closing, released to the seller later unless claims come out of it.
- Indemnity
- The seller’s promise to repay the buyer for a specific loss, such as a tax bill from before the sale.
“The Price Chip” is part of the full course: 8 puzzles on due diligence: repricing a buyout. Biscuit Barrel is fictional; the frauds in the notes are real, settled cases. Try this act’s free chapter, “Adjusted EBITDA”, first.
“The Price Chip” is in Act II: Due Diligence. 8 puzzles, unlimited retries.
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