2min chapter

M&A Talk (Mergers & Acquisitions), by Morgan & Westfield cover image

The Art and Science of Valuing a Middle-Market Business

M&A Talk (Mergers & Acquisitions), by Morgan & Westfield

CHAPTER

Is Working Capital Included in the PSA?

What percentage of the transaction or the enterprise value does working capital typically comprise? Of course, it's going to depend on the industry, but just thinking it at a high level, are usually saying that at about 10% of enterprise value or so. But I will say it's kind of hyper conducive to the networking capital requirements of the industry and more so, the underlying company.

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