Free calculator · Deal structuring
EV to equity bridge: what does the seller actually receive?
The purchase price bridge from enterprise value to equity value: net financial debt, debt-like items, working capital adjustment, locked box vs. completion accounts, live as you type. No sign-up, and no data is sent to my server.
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Enter all euro amounts in €m (e.g. 25 = €25m). The exact amount is shown below each field. * = required field.
Starting point (enterprise value)
Net financial debt
Other bridge items
Working Capital (Peg)
Price mechanism
Equity value calculated
Equity value
€18,525,616Bridge
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Bridge: enterprise value → equity value
Navy = anchor (EV, equity value). Green = addition, red = deduction.
Bridge detail
| Enterprise value (cash-free/debt-free) | €25,000,000 |
| Interest-bearing financial debt | -€8,000,000 |
| Cash and cash equivalents | €2,000,000 |
| Pension provisions (debt-like) | -€1,200,000 |
| Other debt-like items | -€800,000 |
| Non-operating (surplus) assets | €1,500,000 |
| Working capital adjustment (actual less target NWC) | €300,000 |
| Minority interests | -€500,000 |
| Equity value before locked box interest | €18,300,000 |
| Locked box interest / ticking fee | €225,616 |
| Permitted leakage | -€0 |
| Equity value (proceeds to shareholders) | €18,525,616 |
How the EV to equity bridge works
Enterprise value values the company independently of its financing (cash-free/debt-free). To get to the equity value, which is what the shareholders receive, debt is deducted and non-operating assets are added:
Equity value = EV − net financial debt − debt-like items + surplus assets ± WC adjustment − minorities
Net financial debt is interest-bearing debt less freely available cash. Debt-like items are obligations that are treated like debt, above all pension provisions, plus earn-outs, outstanding bonuses or a capex backlog. Surplus assets are non-operating assets (e.g. a property not needed for operations) that increase the equity value.
The working capital adjustment compares actual working capital against an agreed target level (the peg). With a locked box, interest on the fixed equity value is added up to closing, less the distributions permitted in the interim period (permitted leakage).
Worked example
A company is sold at an enterprise value of €25m. It has €8m of financial debt and €2m of cash (net financial debt €6m), €1.2m of pension provisions and €0.8m of other debt-like items. A non-operating property (€1.5m) adds value, working capital is €0.3m above the peg, and €0.5m is attributable to minorities. This gives an equity value of around €18.3m. If the deal is structured as a locked box with 5% interest over 90 days, a ticking fee of around €0.23m is added, for an equity value of around €18.5m. Change the items above and see straight away how the net proceeds move.
Model logic and simplifications
The model keeps financial debt and cash separate so that the net debt logic stays visible in the bridge. The working capital delta carries its own sign (actual above target = uplift, actual below target = deduction). Deliberate simplifications: no automatic split between operating and free cash, no tax effect on the seller side (a net sale proceeds calculator will follow for that), and a single catch-all item for debt-like items. That is enough for quick, robust structuring of a deal; the final net debt and working capital definitions are set in the financial due diligence and in the purchase agreement.
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Confidential initial callFurther reading
- Calculate company value: the enterprise value as the starting point of the bridge
- Determining the purchase price (in German): how the price is formed and negotiated in the process
- LBO calculator: the buyer's return perspective (IRR, MOIC, debt schedule)
- Glossary: enterprise value, equity value, net debt, locked box and more explained
Note
This calculator is for non-binding guidance only and does not constitute financial, tax or legal advice. The results are based on a simplified model using the values you entered and do not replace financial due diligence or professional transaction advice. The specific net debt and working capital definitions are negotiated in the share purchase agreement (SPA). I accept no liability for accuracy, completeness or timeliness.
Frequently asked questions
What is the difference between enterprise value and equity value?
Enterprise value values the operating business on a cash-free/debt-free basis, independent of how it is financed. Equity value is the amount that actually goes to the shareholders after debt has been deducted. The bridge between the two: enterprise value less net financial debt, less debt-like items (pensions, earn-outs), plus non-operating assets, plus or minus the working capital adjustment, less minority interests. This is exactly the reconciliation the tool calculates.
How is net financial debt (net debt) calculated?
Net financial debt = interest-bearing financial debt less freely available cash. Financial debt includes bank loans, bonds, promissory note loans (Schuldscheine), shareholder loans and lease obligations (including off-balance-sheet operating leases under German GAAP, HGB). Important: only offset freely distributable surplus cash. The operating minimum cash belongs to working capital, and trapped or restricted cash is excluded. The exact net debt definition is negotiated in the share purchase agreement (SPA).
What does the working capital adjustment (peg) mean?
Buyer and seller agree on a normalised level of working capital (the peg), usually the 12-month average. If the actual net working capital at the reference date is above it, the seller receives an uplift (they hand over more operating capital); if it is below, there is a deduction. In the calculator: adjustment = actual NWC less target NWC. If the peg is unknown, set actual = target, and the adjustment is zero.
Locked box or completion accounts: what is the difference?
With completion accounts, the purchase price is settled after closing on the basis of the actual balance sheet at the closing date (net debt, working capital). With a locked box, the equity value is fixed at an earlier reference date; the seller often receives interest (a ticking fee) for the period until closing, while only agreed distributions (permitted leakage) are allowed in the interim period. The interest rate is a matter of negotiation and can also be zero.
Is the calculator free and confidential?
Yes. The calculation runs entirely in your browser and no inputs are sent to a server. You can enter real deal figures without them leaving the page. The calculator can be used without registration and without giving an email address; you only need an email address for the optional PDF delivery.