{
  "title": "Closing and Structure in M&A | Tero Nummenpää, Ilkka Liljeroos | Neuvottelija 200",
  "titleOriginal": "Yrityskauppojen closing | Tero Nummenpää Ilkka Liljeroos | Neuvottelija 200",
  "episodeNumber": "200",
  "guest": "Tero Nummenpää, Ilkka Liljeroos",
  "publishedAt": "2023-07-03",
  "duration": "45:16",
  "durationIso": "PT45M16S",
  "youtube": "https://www.youtube.com/watch?v=WrnLVZBVM9k",
  "fiCanonical": "https://www.neuvottelija.fi/fi/episodes/295-yrityskauppojen-closing-tero-nummenpaa-ilkka-liljeroos-neuvo",
  "originalLanguage": "fi",
  "format": "full",
  "topics": [
    "ma_exits",
    "negotiation",
    "saas_software"
  ],
  "description": "Tero Nummenpää, chair of the board of Translink Corporate Finance, and Ilkka Liljeroos, managing partner at DLA Piper, work through the mechanics of the last day of an acquisition with Sami Miettinen in the channel's two hundredth episode. The episode is built backwards from closing: the bridge from enterprise value to equity value, and the misunderstanding that arises when a buyer offers a number without saying which of the two he means. Net debt covers interest-bearing debt, shareholder loans and tax liabilities but not trade payables; the working capital adjustment exists to prevent a seller delaying supplier payments and accelerating invoicing before closing, and to even out seasonal swings, and works by comparing working capital at closing against a twelve-month average. Liljeroos distinguishes share deals from business transfers and notes two things the tweezers cannot leave behind: employment liabilities, which follow the employee by operation of law, and competition law liability, which means a deal cannot be structured as a business transfer to strand a cartel exposure. The open question of the episode is whether SaaS prepayments are working capital or net debt, where both state plainly that opinions differ. On mechanisms, closing accounts produce a price nearer the target's actual state while a locked box shifts business risk to the buyer from the lock date — which matters because merger filings have become more common and can take time. The report DLA Piper publishes annually showed earn outs about 20 per cent more common in 2022 than in 2021. The most instructive passage is an accounting error that is a hundred thousand on the balance sheet and a million in price at a ten times multiple, and the evidential problem that follows. The closing argument is that a letter of intent negotiated with seven or ten parties at once is where the seller's leverage is, because after exclusivity is granted it is gone.",
  "chapters": [
    {
      "t": "00:00",
      "title": "Tero Nummenpää, chair of Translink Corporate Finance, and Ilkka Liljeroos, managing partner at DLA Piper",
      "seconds": 0
    },
    {
      "t": "01:00",
      "title": "Enterprise value, net debt, the working capital adjustment and equity value",
      "seconds": 60
    },
    {
      "t": "03:30",
      "title": "Share deal or business transfer?",
      "seconds": 210
    },
    {
      "t": "05:20",
      "title": "Liabilities that transfer in a business transfer; specific indemnities",
      "seconds": 320
    },
    {
      "t": "07:20",
      "title": "The working capital adjustment — it prevents gaming and evens out seasonality",
      "seconds": 440
    },
    {
      "t": "11:20",
      "title": "SaaS prepayments — working capital or net debt?",
      "seconds": 680
    },
    {
      "t": "13:50",
      "title": "How front- and back-loaded costs affect it; seller and buyer views in growth companies",
      "seconds": 830
    },
    {
      "t": "15:40",
      "title": "The investment bank's model should be built monthly",
      "seconds": 940
    },
    {
      "t": "16:10",
      "title": "On care with the calculations in the agreement; worked examples as annexes",
      "seconds": 970
    },
    {
      "t": "17:40",
      "title": "Working capital in a business transfer and how it is funded",
      "seconds": 1060
    },
    {
      "t": "19:50",
      "title": "Closing accounts and locked box mechanisms and how they differ",
      "seconds": 1190
    },
    {
      "t": "22:30",
      "title": "Leakage and locked box interest; competition authority delays; back from the zero-rate world",
      "seconds": 1350
    },
    {
      "t": "25:10",
      "title": "Which to choose — locked box or closing accounts?",
      "seconds": 1510
    },
    {
      "t": "27:30",
      "title": "Trends DLA Piper has found — earn outs on the rise",
      "seconds": 1650
    },
    {
      "t": "29:20",
      "title": "Why a deferred consideration mechanism, an earn out, can be a good solution",
      "seconds": 1760
    },
    {
      "t": "30:10",
      "title": "Errors in due diligence, bookkeeping and modelling; the multiple effect",
      "seconds": 1810
    },
    {
      "t": "32:40",
      "title": "Direct and indirect damage — disputes have become rarer",
      "seconds": 1960
    },
    {
      "t": "33:40",
      "title": "The effect of the damage — on the multiple or as a one-off? First or second forecast year",
      "seconds": 2020
    },
    {
      "t": "35:20",
      "title": "Finns are reliable and look for shared growth",
      "seconds": 2120
    },
    {
      "t": "37:20",
      "title": "Salary adjustments — a common source of hesitation",
      "seconds": 2240
    },
    {
      "t": "38:20",
      "title": "The cornerstone of the Translink–DLA Piper partnership is a well-made letter of intent",
      "seconds": 2300
    },
    {
      "t": "40:40",
      "title": "The benefits of an exclusivity process; non-competes; reinvestment mechanisms",
      "seconds": 2440
    },
    {
      "t": "43:05",
      "title": "Different industries can have a large effect on transaction structure",
      "seconds": 2585
    },
    {
      "t": "44:00",
      "title": "Always ask both the investment banker and the law firm",
      "seconds": 2640
    },
    {
      "t": "44:34",
      "title": "Contact details for Tero Nummenpää and Ilkka Liljeroos, and the #neuvottelija Platinum extra interviews",
      "seconds": 2674
    }
  ],
  "sourceTranscriptType": "macwhisper_srt",
  "subtitleMethod": "none",
  "provenance": "Owner page assembled from YouTube metadata, the neuvottelija.fi episode record and a MacWhisper transcription of the Finnish audio. The chapter marks are the publisher's own list as released with the video, translated into English here; every one falls within ten seconds of a real transcript cue. No English caption track was produced, so no transcript is published here. The audio contains one gap of about 28 seconds at 00:40:20, at the start of the letter-of-intent section; it is disclosed in the body of the summary and nothing has been inferred over it. The cleaned Finnish cue file corrects the transcription's mangled renderings of the speakers' names and of the transaction vocabulary the episode turns on (Translink Corporate Finance, Ilkka Liljeroos, enterprise value, locked box, closing accounts, leakage, earn out, EBITDA, signing, carve-out, specific indemnity); numeric values were not altered. The transcript carries no speaker labels and this episode has two guests, so speaker attributions in the summary follow the content of each passage and the publisher's own chapter list; where a point could not be attributed with confidence it is reported without a name.",
  "slug": "ep200-yrityskauppojen-closing-nummenpaa-liljeroos",
  "guestsCanonical": [
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    "Ilkka Liljeroos"
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  "guestPages": [
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    "https://www.neuvottelija.com/podcast/guests/ilkka-liljeroos/"
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  "page": "https://www.neuvottelija.com/podcast/episodes/ep200-yrityskauppojen-closing-nummenpaa-liljeroos/",
  "markdown": "https://www.neuvottelija.com/podcast/episodes/ep200-yrityskauppojen-closing-nummenpaa-liljeroos/index.md",
  "captions": null,
  "transcript": null,
  "videoId": "WrnLVZBVM9k",
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  "qaSemanticVerdict": "transcript_timecoded"
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