Business Acquisition Glossary

Buying selected assets and liabilities of a business rather than its shares — the most common structure for BC SMB deals.

A buyer-side advisor who represents only the buyer's interests throughout the entire acquisition process.

Expenses added back to net income when calculating SDE or EBITDA because they are owner-specific or non-recurring.

A licensed intermediary who represents the seller in marketing and selling a business — not the buyer's advocate.

A government-backed term loan from the Business Development Bank of Canada specifically for buying a business.

BC legislation historically protecting creditors when a business's inventory is sold outside the ordinary course — largely repealed but still relevant to check.

Conditions that must be satisfied or waived before a buyer or seller is legally obligated to complete the transaction.

The formal investigation of a business before closing — financial, legal, and operational — to verify what the seller has represented.

Earnings Before Interest, Taxes, Depreciation, and Amortization — the standard profitability metric for managed businesses.

A contingent payment where the seller receives additional consideration only if the business hits agreed financial targets post-closing.

The number applied to SDE or EBITDA to arrive at a business's estimated market value.

The intangible premium paid above the fair market value of a business's net identifiable assets.

A portion of the purchase price held in trust after closing and released only if the seller meets post-closing conditions.

The risk that a business's performance is heavily dependent on one individual — typically the owner — and would deteriorate if that person left.

A non-binding written agreement that locks the price, key terms, and exclusivity period before due diligence begins.

A legal covenant preventing the seller from competing with the business they just sold for a defined period and geography.

A business acquisition opportunity that is sourced privately, before or without ever being listed on a business-for-sale marketplace.

The definitive binding contract that governs every term of a business acquisition — the final deal document.

Financial statements restated to reflect the true earning power of the business, removing owner-specific and non-recurring items.

Contractual statements of fact made by the seller about the business that survive closing and create liability if false.

The total economic benefit a single working owner-operator receives from a business annually.

Buying the shares of an incorporated company, inheriting all assets and liabilities including hidden ones.

The post-closing period during which the seller works alongside the new owner to transfer knowledge, relationships, and operations.

Seller-provided financing where the seller accepts a portion of the purchase price as a promissory note repaid over time.

Current assets minus current liabilities — the short-term liquidity a buyer needs the business to have at closing.