What are examples of consideration in an acquisition?
Consideration means the same thing as purchase price. If you ever get into mergers & acquisition, you’ll realize that a company almost never pays 100% cash when they buy another business. As the example below illustrates, there are a number of ways other than cold hard cash that can be transferred to the seller in an acquisition.
For example, if Double Eagle Ventures acquired another company for $10,000,000 of stock issued, $3,000,000 of cold hard cash, and earnouts (contingent consideration) with a fair value of $2,100,000, then total consideration paid to the seller would be $15,100,000.
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