Asset Sale
A transaction where the buyer purchases specific assets (equipment, inventory, contracts, IP, goodwill) rather than the entity itself. The seller keeps the legal entity and its liabilities. Buyers prefer asset sales for liability protection and tax benefits (stepped-up basis). Sellers often prefer stock sales to avoid double taxation.
Where This Matters
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Related Terms
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Enterprise Value (EV)Seller's Discretionary Earnings (SDE)EBITDA MultipleQuality of Earnings (QoE)Add-BacksDue DiligenceLetter of Intent (LOI)Holdback (Escrow)Earn-OutStock Sale (Equity Sale)GoodwillPersonal GoodwillCommunity PropertySeparate PropertyPereira MethodVan Camp MethodTransmutationBuy-Sell AgreementShotgun Clause (Russian Roulette Clause)Right of First Refusal (ROFR)View all →