Rating agencies classify the creditworthiness of debtors according to predefined rating procedures (rating). An AAA rating is given to a bond whose risk of default does not actually exist.
Abbreviation for "Asset Backed Securities". Bonds or debentures that are secured by assets, mostly receivables.
The term "Accession" refers to the accession to a loan agreement on the part of the company that originally took out the loan. In this case, the buyer of the company takes out a loan to finance the purchase price, which is secured by assets of the acquired company. An accession is therefore often found in connection with the financing of company acquisitions (acquisition finance).
Documentation of the accession to a credit agreement (Accession).
An account is a common name for the combination of mutual receivables and payables of two parties.
Pledge of an account.
Accounting is the term used to describe the bookkeeping of a company. If a transaction is called "purely accounting-relevant" in negotiations, this means that the transaction has an impact on the balance sheet, but not on liquidity.
Accruals are sums of money that an entity sets aside for expected future expenses. They therefore correspond to provisions for future expenses. For this reason, there is a conceptual overlap with the terms provisions and reserves.
Acquisition of a company or part of a company. See also Share Deal and Asset Deal.
Acquisition finance refers to the capital that a company uses to buy another company. The purchase is often financed by taking out loans. Due to its leverage effect, acquisition finance enables company buyers to achieve a higher return on their invested capital.
Group of companies to be acquired.
An Acquisition Investigation is an alternative name for the term Due Diligence (see also Due Diligence).
Analysis of a company acquisition project (takes place within the framework of due diligence).
An added value describes the increase in value of a company through an investment/total takeover.
As soon as further companies or holdings are acquired following a transaction that has already been carried out, this is an add-on transaction.
Adjusted present value approach
The Adjusted Present Value (APV for short) is a methodical approach to company valuation using the Discounted Cash Flow (DCF) valuation procedure. The value of a company's equity is determined by deducting net financial liabilities from the total value of the company (the entity value).
Abbreviation for "American Depositary Receipts" and "Alternative Dispute Resolution".
An advisory board is the advisory council of a company. It can be designed as a controlling or purely advisory body.
In principal-agent theory, the agent is a person who acts for another person, the principal. A common manifestation is the agent as a sales agent, such as a sales representative.
The premium is the difference between the nominal value of the share and the price paid for it by the transferee.
Acquisition of a company or part of a company. See also Share Deal and Asset Deal.
The term alignment originally comes from biology and in the M&A business refers to the adjustment of behavioral patterns of employees of merger candidates.
Alternative Dispute Resolution
Alternative Dispute Resolution (ADR) is a collective term for alternative dispute resolution procedures. Mediation is the best known ADR procedure. In company purchase contracts, a staged ADR procedure is often agreed upon, according to which a dispute resolution procedure must first be passed through before (arbitration) courts can be called upon.
American Depository Receipts
American Depository Receipts (ADRs) are depository receipts issued by a US bank that allow US investors to invest easily in foreign stocks.
Amortization is a special form of balance sheet depreciation. Here, amortization is applied to intangible assets, especially goodwill. Depreciation on tangible assets (see also Depreciation) must be distinguished from this.
Ancillary agreement to a main contract, such as a company purchase agreement.
An angel investor (also known as a "business angel") is a wealthy private individual who invests parts of his own assets in newly founded companies (start-ups). Due to his own professional activities, an angel investor often has a high level of professional expertise and a large network. The start-up can profit from this in addition to the pure financial performance. However, an angel investor must be distinguished from a venture capitalist.
The annex to a treaty or report is called an annex. Synonyms are Attachment, Enclosure and Exhibit.
British English term for the annual financial statements of a company.
Annual financial statement
US American English term for the annual financial statements of a company.
An anti-dilution clause in participation agreements is intended to protect shareholders from the percentage and value dilution of their shareholding in later financing rounds.
The APV or Adjusted Present Value is a methodical approach to company valuation using the Discounted Cash Flow (DCF) valuation procedure. The value of a company's equity is determined by deducting net financial liabilities from the total value of the company (the entity value).
Arbitration refers to an arbitration procedure that is used in conflicts such as litigation and is decided by non-state courts.
An arbitration clause is the English term for an arbitration clause. The contracting parties sign an agreement in which it is stipulated that all disputes that may arise in connection with the contract are to be decided in a binding manner by an arbitration court.
An arrangement fee is a commission or fee that a bank (arranger) receives for arranging the syndication, structuring and documentation of a loan under a syndicated loan. It must be paid by the borrower before the loan is paid out.
An arranger is the bank that assumes the structuring and resale of parts of the loan (syndication) in the case of syndicated loans.
An asset describes an asset. In the M&A context, an asset is any object of a transaction, regardless of whether it is carried out as an asset deal or a share deal.
Asset Backed Securities
Asset-backed securities (ABS) are asset-backed securities that are used to secure payment claims against a special purpose entity. The special purpose entity acquires the receivables and securitizes them as securities.
In an ABS (asset backed securities) transaction, the receivables sold can be assigned to different categories, for example trade receivables. Based on this categorisation, typical legal and economic issues can be identified and standard solutions developed for them.
In an asset deal, certain assets are defined, listed and assigned a respective value. The individual assets, which also include liabilities (including intangible assets such as customer relationships), can then be acquired by a buyer. The asset deal can thus be distinguished from a share deal, in which the shares are acquired.
Asset finance is a generic term for forms of financing in which the legal and economic ownership of the object to be financed is not held by the company but by the investor. Leasing is a classic example.
Asset stripping means that a company is broken up by the sale of individual company shares or individual assets.
The assignee is the new creditor of a claim assigned by the assignor, in factoring the factor is usually the assignee.
An assignment loan is a short-term cash loan secured by the assignment of outstanding receivables of a company. As a rule, banks only lend on domestic receivables and only in a lump sum of 30 to 60 percent of the assigned total receivables. Factoring is therefore more interesting from a business management point of view for many companies.
The attachment to a contract or report is called an attachment. Synonyms are Annex, Enclosure and Exhibit.
An auction is the sale of a company by means of a bidding process (see also Bidding Process).
An auction process refers to the procedure which the organizer (company seller or investment bank) has planned for the execution of the auction.
In an auction sale, a company or other assets are sold by means of a bidding process (auction).
An audit is the annual or other audit of a company, which is carried out by an independent auditor.
Committee of the supervisory body of a company responsible for matters relating to the statutory audit of the company (audit).
An auditor is an independent expert responsible for the audit (annual or other) of a company.
An Auditors Certificate is a document that summarizes the results of the auditor at the end of the audit.
Period during which a corporate loan can be drawn down.