The multiple gets the headline. The terms decide what reaches your account and what can still go wrong.

Put two offers next to each other

Imagine one offer at 6.0x EBITDA with 60% cash at closing, 20% contingent and 20% rollover. Another says 5.2x but pays 85% at closing. (These are illustrations, not claims about market norms).

Offer A gets the better headline. Offer B puts more cash in the seller’s hands on day one. The better deal depends on what must happen to collect later payments, who controls that result, what the rollover is really worth, and how you want to work after closing.

Know what each dollar really is

  • Cash at close: the clearest part of the consideration, after accounting for net debt, working-capital adjustments, transaction expenses, and any escrow or holdback.
  • Seller note: money owed by the buyer later. Interest, security, subordination, repayment schedule and offset rights all matter.
  • Earnout or retention payment: money you receive only if the agreed result is achieved. The definition and who controls the result matter as much as the target.
  • Rollover equity: money reinvested in the buyer or its parent. It may create upside, but it is usually illiquid and exposed to the buyer’s future performance.

Read past the percentages

  • What exactly triggers the earnout?
  • Can the buyer change staffing, pricing or investment in a way that affects it?
  • Is the seller note secured, and can claims be offset against payments?
  • Which entity issues the rollover equity, and what rights come with it?
  • Who keeps A/R and WIP, and how is working capital handled?
  • What compensation and time commitment are expected after closing?
  • What sits in escrow, for how long, and for which claims?
  • How will each part of the consideration be taxed?

Compare the cash flows, not the headlines

Model what you expect to receive at closing, after one year and after every contingent period. Then run a downside case. What happens if retention slips, EBITDA misses or the buyer’s next transaction takes longer than planned?

If a buyer pays for growth it hopes to unlock from your client base, ask who funds the new services and who controls the