All M&A glossary terms

Process and methods to estimate the economic value of a company.

Sale of part of a business; operational and legal separation.

Confidential sales document presenting the company to buyers.

Mexican antitrust authority; thresholds and notification of concentrations in M&A.

How the deal is paid: cash, stock, earn-out.

Risk when few customers generate most of revenue.

Virtual or physical space with documents for diligence.

When to use it for SMEs

Debt repayment capacity; key ratio for lenders.

Deep review of the business by the buyer before closing.

Part of the price paid after closing if targets are met.

Operating profitability measure before interest and taxes.

Real ranges in the Mexican market

Capital from abroad; relevant for sectors and for buyer interest in Mexican SMEs.

Non-binding indication of interest and price range.

Law regulating foreign investment in Mexico; restricted sectors and when authorization is required.

Letter of intent that sets key deal terms.

Mergers and acquisitions; buying and selling companies.

Body that reviews and may authorize foreign investment in sectors restricted under the LIE.

Confidentiality agreement before sharing information.

Most common adjustments in Mexican SMEs

Contractual statements by the seller about the business.

Criteria that define a product's origin for preferential tariff treatment under USMCA.

Tranche of the price the buyer pays over time as debt to the seller; fixed obligation, not contingent.

Short anonymous summary to attract buyer interest.

Document with the main terms of the purchase agreement.

Transition services agreement after closing.

Trade agreement between Mexico, US and Canada; relevant for nearshoring.

Resources needed to run the business day to day.