Equity Bridge

The equity bridge is the reconciliation from enterprise value to equity value. Typical items are net debt, pension provisions, further debt-like items, non-operating assets as well as deviations from the agreed working capital level.

The equity value corresponds to the sellers’ gross claim. The purchase price actually paid out may deviate from this due to earn-outs, a vendor loan, reinvestment and an escrow retention. Which items are treated as ‘debt-like’ or ‘cash-like’ is regularly the subject of intensive negotiation. This topic is examined in more detail in our article.