Clarify the document base first.
Structure the data-room evidence and open questions. Only then should the point be translated into price, warranty or condition precedent.
Purchase price & earn-out
Business valuation in the SPA: EBITDA, multiples and normalisations
Business valuation in the SPA: reflect EBITDA, multiples, normalisations, price formula, warranties and disclosure clearly.
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16 July 2026 · Mag. Bernhard Brandauer, Rechtsanwalt
Business valuation in an acquisition does not end with a number in the information memorandum. EBITDA, multiples and normalisations must be translated into the LOI, SPA, price formula and disclosure. This is not a valuation guide and does not replace tax or corporate finance advice. It explains how valuation assumptions can be documented legally. See also the information memorandum, purchase-price adjustment and the disclosure letter.
Secure valuation
Are valuation assumptions traceable in the contract?
Answer two questions on the specific finding.
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Are EBITDA, normalisations and multiple assumptions documented in the data room?
The first finding determines whether documentation is enough or contract mechanics are needed.
All paths at a glance
Overview of all answers.
The point is well prepared contractually.
If documents and contract align, the finding can be carried into negotiations, the signing list and the closing plan.
Sharpening is needed before signing.
Generic wording is not enough. The contract should state which documents matter, who bears risk and which action is expected before closing.
Document EBITDA and normalisations
Document EBITDA and normalisations
Negotiations often use adjusted EBITDA. Legally, the decisive question is which adjustments were actually agreed or disclosed. A management adjustment without evidence should not silently become the contract basis.
The data room should show annual accounts, monthly figures, one-off effects, owner remuneration, special costs and forecast assumptions. Only then can the buyer review whether the multiple was discussed on the same basis.
From valuation to purchase-price formula
From valuation to purchase-price formula
A valuation can be a negotiation basis. The contract needs a concrete price mechanism, such as fixed price, locked box, closing accounts or earn-out. The mechanism allocates risk between buyer and seller.
For variable mechanisms compare locked box and closing accounts and earn-out rules.
Use warranties and disclosure to avoid expectation disputes
Use warranties and disclosure to avoid expectation disputes
If certain revenue, customers, costs or forecasts support the valuation, they should not live only in presentations. The SPA may include warranties, knowledge qualifiers, disclosure and non-reliance rules.
The aim is not to guarantee every forecast. The aim is to distinguish promised facts from assumptions the buyer evaluates commercially.
Review grid
Translate valuation into contract language
The overview shows typical review points and contractual effects.
| Point | Why it matters | Contract effect |
|---|---|---|
| EBITDA EBITDA | Normalisation unclear | Definition and schedule |
| Multiple Multiple | Negotiation metric only | Avoid false warranty |
| Forecast Forecast | Future uncertain | Disclosure and limits |
| Price Price | Dispute over deduction | Closing accounts or locked box |
The contract, data room and economic relevance in the individual case are decisive.
Practical note: Every normalisation needs a data-room trail. If it is missing, it should not be carried into the price formula or a warranty without review.
FAQ
Frequent questions.
Should EBITDA be defined in the SPA? +
Yes, if it affects purchase price, earn-out or closing accounts. The definition should name adjustments and data source clearly.
Does the seller guarantee a valuation? +
Usually not as a whole. Specific facts, documents or disclosures supporting the valuation can be warranted.
What matters legally about multiples? +
Multiples are usually negotiation metrics. Legally, the key is which base figures, normalisations and assumptions receive contractual effect.
Topics
Business valuationEBITDAPurchase priceSPA
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