medium · Private Equity pe-core
A buyer is using a 'Locked-Box' mechanism for an acquisition. The enterprise value is agreed at $200M as of the 'Locked-Box Date'. Between that date and the closing, the company pays a $5M dividend to the seller and $1M in management fees to the seller's parent company.
How much 'leakage' must be deducted from the equity price at closing?
- $0M
- $1M
- $5M
- $6M
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