Comments on: Working Capital Series: What to do at settlement? http://www.theprivateequiteer.com/working-capital-series-what-to-do-at-settlement/ A vignette into the aberrant thoughts of a private equiteer Sat, 28 Aug 2010 13:18:38 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Working Capital Series: the locked box approach | The Private Equiteer - A Private Equity Blog http://www.theprivateequiteer.com/working-capital-series-what-to-do-at-settlement/comment-page-1/#comment-3836 Working Capital Series: the locked box approach | The Private Equiteer - A Private Equity Blog Wed, 19 Aug 2009 07:51:40 +0000 http://www.theprivateequiteer.com/?p=2062#comment-3836 [...] suggestion in a recent post was to draw a line in the sand and fix the main working capital drivers so a dollar-for-dollar [...] [...] suggestion in a recent post was to draw a line in the sand and fix the main working capital drivers so a dollar-for-dollar [...]

]]> By: Working Capital Series: Introduction | The Private Equiteer - A Private Equity Blog http://www.theprivateequiteer.com/working-capital-series-what-to-do-at-settlement/comment-page-1/#comment-3835 Working Capital Series: Introduction | The Private Equiteer - A Private Equity Blog Wed, 19 Aug 2009 07:13:50 +0000 http://www.theprivateequiteer.com/?p=2062#comment-3835 [...] Working Capital Series: What to do at settlement? [...] [...] Working Capital Series: What to do at settlement? [...]

]]> By: The Private Equiteer http://www.theprivateequiteer.com/working-capital-series-what-to-do-at-settlement/comment-page-1/#comment-3794 The Private Equiteer Tue, 11 Aug 2009 05:54:06 +0000 http://www.theprivateequiteer.com/?p=2062#comment-3794 My experience is that there are fewer issues with the locked boxed method, but vendors are sometimes wary about giving you the business financially months before giving you the business legally. They often argue you shouldn't profit unless you take the risk. I've seen mechanisms to get around this by introducing some sort interest charge, but then this becomes another point of contention. But I definitely agree that it's the lesser of two evils. My experience is that there are fewer issues with the locked boxed method, but vendors are sometimes wary about giving you the business financially months before giving you the business legally. They often argue you shouldn’t profit unless you take the risk. I’ve seen mechanisms to get around this by introducing some sort interest charge, but then this becomes another point of contention. But I definitely agree that it’s the lesser of two evils.

]]> By: Alex http://www.theprivateequiteer.com/working-capital-series-what-to-do-at-settlement/comment-page-1/#comment-3790 Alex Mon, 10 Aug 2009 14:54:02 +0000 http://www.theprivateequiteer.com/?p=2062#comment-3790 Hi TPE - i call it the 'dreaded' LB because rather like churchill's comment on democracy, it's the worst way of sorting out working capital apart from all of the other ways. so we're kind of stuck with it... i think the fundamental problem is information asymmetry - ie the acquirer just can't get quality information from management like the vendor can. i'd be interested in your thoughts. Hi TPE – i call it the ‘dreaded’ LB because rather like churchill’s comment on democracy, it’s the worst way of sorting out working capital apart from all of the other ways. so we’re kind of stuck with it…

i think the fundamental problem is information asymmetry – ie the acquirer just can’t get quality information from management like the vendor can. i’d be interested in your thoughts.

]]> By: The Private Equiteer http://www.theprivateequiteer.com/working-capital-series-what-to-do-at-settlement/comment-page-1/#comment-3765 The Private Equiteer Thu, 06 Aug 2009 05:24:50 +0000 http://www.theprivateequiteer.com/?p=2062#comment-3765 Thanks for the note Alex. Why do you call it the "dreaded" locked box approach? And what do you consider a better alternative? Just curious so I have some basis for a post if I do write more on this topic. My experience is that there are always issues around agreeing WC, net assets, etc., but I still haven't found a perfect template solution. Thanks for the note Alex. Why do you call it the “dreaded” locked box approach? And what do you consider a better alternative? Just curious so I have some basis for a post if I do write more on this topic. My experience is that there are always issues around agreeing WC, net assets, etc., but I still haven’t found a perfect template solution.

]]> By: Alex http://www.theprivateequiteer.com/working-capital-series-what-to-do-at-settlement/comment-page-1/#comment-3753 Alex Tue, 04 Aug 2009 12:58:37 +0000 http://www.theprivateequiteer.com/?p=2062#comment-3753 Will you be posting your thoughts on the dreaded locked box approach? Will you be posting your thoughts on the dreaded locked box approach?

]]> By: Working Capital Series: What to do at settlement? | India Updates http://www.theprivateequiteer.com/working-capital-series-what-to-do-at-settlement/comment-page-1/#comment-3724 Working Capital Series: What to do at settlement? | India Updates Sun, 02 Aug 2009 21:38:45 +0000 http://www.theprivateequiteer.com/?p=2062#comment-3724 [...] link: Working Capital Series: What to do at settlement? Share and [...] [...] link: Working Capital Series: What to do at settlement? Share and [...]

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