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Are your portfolio or client companies
preparing to negotiate a new round of financing, or an acquisition or sale of the company? |
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How will the terms of the transaction affect the distribution
of proceeds that you or your clients will receive from an acquisition of the company or from a potential future acquisition? |
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What are the critical points of merger consideration
or sale price, which can cause significant changes in the distribution that you or your clients will receive? |
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| Determining or modeling
the distribution of acquisition proceeds back to the security holders is one of the more daunting tasks
in a transaction. Hours are spent constructing spreadsheets to analyze the effects of liquidation preference,
capped participation, accreting dividends, management carve outs, and vested options and warrants upon the
potential distribution to investors. Each spreadsheet model must be manually manipulated every time the
deal terms change, or separately constructed for each potential “cut” or estimate of total acquisition proceeds. |
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