|V|
| M&A Term | Definition | Note |
| Valuation | the act or process of developing an opinion or conclusion of value at a Valuation Date using a Premise of Value, a Standard of Value, and one or more Valuation Approaches. Also known as Appraisal. | N7 |
| Valuation Approach | a general manner of estimating a value that uses one or more specific Valuation Methods. See also Cost Approach, Asset Approach, Income Approach, and Market Approach. | N7 |
| Valuation Date | the specific point in time at which the conclusion of value applies. Also known as Effective Date, Measurement Date, or date of value. Contrast with Report Date | N7 |
| Value in Use | the value of an asset, business, or investment in its current or continued use. Contrast with Value in Exchange. Also known as value in continued use, or existing use value | N7 |
| valuation | Process of determining the value of a portfolio of assets, including any accrued income. (See also actuarial valuation.) | N6 |
| value at risk (VaR) | Technique to analyse variations in performance and to estimate the amount by which a portfolio could underperform. | N6 |
| value date | Date agreed between parties for the settlement of a transaction. | N6 |
| value investment | Approach to investment which places emphasis on identifying shares which are believed to be underpriced (on the basis of indicators such as P/E ratio and dividend yield) by the market. | N6 |
| variance | Degree to which a given set of number/ data points vary about the mean. It is the square of the standard deviation. | N6 |
| VC | See venture capital. | N6 |
| venture capital (VC) | Investment in a company that is at a relatively early stage of development and is not listed on a stock exchange. A venture capitalist raises money from investors to invest in such opportunities. These investments are typically risky but potentially very profitable. Generally considered a sub-sector of the private equity market. | N6 |
| vesting | Acquisition by a pension plan member of an absolute right to an immediate or deferred benefit by fulfilling prescribed conditions, especially service requirements. | N6 |
| vintage year (private equity/ infrastructure) | Year in which a fund is closed and makes its first investment. | N6 |
| VIX | Widely used index maintained by the Chicago Board of Exchange, reflecting the expectation of volatility in the market over the next 30-day period. | N6 |
| void rate (real estate) | Percentage of a property that is vacant at a point in time. | N6 |
| volatility | Variability of the price of a security. Typically quantified as standard deviation. (See also standard deviation of return.) | N6 |
| volatility swap | Forward contract for which the underlying is the volatility of a given product. This is a pure volatility instrument allowing investors to speculate solely upon the movement of a stock’s volatility without the influence of its price. | N6 |
| volume | Number of shares or contracts traded in a security or an entire market during a given period, often used in the context of average daily or weekly volume. | N6 |
| volume weighted average price (VWAP) | Benchmark for trading efficiency. It measures the average price at which a share is traded in the market over a period, and can be compared against the price actually achieved by a fund manager. VWAP is calculated by adding up the monetary value traded for every transaction (price times number of shares traded) and then dividing by the total number of shares traded in the period. | N6 |
| voting rights | Entitlement of an ordinary shareholder to participate in the running of a company by voting on resolutions. | N6 |
| voting shares | Shares that give the stockholder the right to vote at company meetings — for example, on the election of directors. | N6 |
| vulture fund | Fund which buys securities in distressed investments, such as high-yield bonds in or near default, or equities that are in or near bankruptcy. | N6 |
| VDD | Vendor Due Diligence. | N2 |
| VDR | Virtual Data Room. | N2 |
| Vendor | Seller. | N2 |
| Vendor Due Diligence (VDD) | Due diligence carried out on a company by the seller or by advisors acting on its behalf. This enables the seller to remedy any problems before the actual transaction, typically leading to a higher purchase price. Vendor due diligence helps to avoid the information imbalance that can arise when the buyer conducts Purchaser Due Diligence and sometimes the buyer ends up knowing more about the Target than the seller. This is particularly likely to be the case when selling a subsidiary or where the vendor is a Financial Investor. Vendor due diligence may be appropriate ahead of an Auction Process, for example. The vendor due diligence report can be made available to potential buyers, who will usually seek to negotiate the issuance of a Reliance Letter. Since this type of letter is only rarely issued, the potential buyers will often wish to carry out their own Due Diligence. | N2 |
| Vendor Loan | Loan granted by the seller to the buyer of a company in order to help finance the transaction; the purpose of a vendor loan may be to tie in the seller beyond Closing due to the default risk. | N2 |
| Venture Capital Investor | A venture capitalist provides a Start-up (or other company at an early stage of its development) with debt capital or equity capital. A venture capital investor usually exercises a degree of control over how the start-up is run. In this respect, he differs from a Business Angel or Angel Investor. | N2 |
| Vesting | Vesting is the process by which rights become non-forfeitable; examples include entitlements under a management share scheme. | N2 |
| Virtual Data Room (VDR) | Data room that provides the parties engaged in due diligence with the required documents on a special secure Internet platform. The advantage over a Physical Data Room is that more than one party or user can view the documents at the same time. It is also possible to compile extensive statistics on Data Room usage and the data accessed. The security settings can be adapted to the needs of the particular transaction; different user groups can be assigned different levels of authorisation. | N2 |
| Waiver | A party’s surrender of a known right or failure to insist on performance of an obligation. | N2 |
| Warranties | In general a promise or a guarantee by one party (e.g. the seller) that specific facts with regard to the Target are true and accurate. In the event the warranty becomes untrue or inaccurate, the other party (e.g. the buyer) has remedies in the form of compensation claims against the promising party (e.g. the seller). | N2 |
| Warranty & Indemnity Insurance | Insurance usually taken out by the buyer (when it is commonly referred to as “buyer-side W&I insurance”). It covers the buyer against factors and risks of which it is unaware and which may reduce the value of the investment. In some cases, W&I insurance may also cover the buyer against known risks resulting from the acquisition of a company. | N2 |
| Waterfall | Order in which proceeds are distributed. Priority may be given to repaying debt, for example, followed by a specific group of shareholders and then the remaining shareholders (see also Exit Waterfall). | N2 |
| Whereas Clauses | Preamble. | N2 |
| White Knight | Person or company that comes to the aid of a company facing a Hostile Takeover and makes a competing bid for the Target. Seeking out a white knight is intended to safeguard the interests of the target company. | N2 |
| W&I Insurance | Warranty & Indemnity Insurance. | N2 |
| Windfall Profit | Unforeseen, fortuitous or incidental profit. | N2 |
| Working Capital | Broadly speaking, a company’s current assets (e.g. cash, stock, trade receivables) less its current liabilities (e.g. trade payables). A detailed definition must be included in the contract in each individual case. | N2 |
| Wrap-up | Summary or review of negotiations, a meeting or a Conference Call either at the end of discussions or by phone at a later date. | N2 |
| Wrong-pocket Clause | Provision in a sale and purchase agreement that remedies incorrect allocation of assets in an Asset Deal. This applies in particular if only part of an existing company is being sold. By virtue of the principle of certainty under property law, each particular asset of the business being sold must be individually identified, or at least determinable, in the agreement. This is often not possible for each item at signing. There is thus a risk of the parties realising after closing that software or receivables, for example, were inadvertently sold along with the main asset despite the fact that they form part of the business remaining with the seller (or vice versa). The relevant item was thus placed in the “wrong pocket” or remained there. A Wrong-pocket Clause obliges the relevant party to do everything in its power to return the misallocated asset after closing (obligation on the part of the buyer) or to transfer it (obligation on the part of the seller, see also Catch-all Clause), usually without any payment. Unlike a catch-all clause, a wrongpocket clause is a reciprocal arrangement. | N2 |
| Valuation | an estimation of the worth of something. Often subjective and calculated | N5 |
| VAT (Value Added Tax) | Is a tax on the sale of most goods and services. Different rates apply. | N5 |
| Vendor | a person or company that sells or disposes of the target entity. | N5 |
| Vendor Finance | Can either be in the form of deferred loans from, or shares subscribed by, the vendor. The vendor may well take shares alongside the management of the new entity. This category of finance is generally used where the vendor’s expectation of the value of the business is higher than that of management and the institutions backing them. | N5 |
| Venture capital | Equity finance in an unquoted, and usually quite young, company to enable it to start up, expand or restructure its operations entirely. It’s cheaper than bank finance initially because paying dividends can be deferred; it also provides a strategic partner – but it implies handing over some control, a share of earnings and decisions over future sales | N5 |
| Venture Capital / VC | a segment of the pcrivate equity industry which focuses on investing in new companies with high growth rates. Usually, expects high and quick returns. | N5 |
| Vertical Integration | Where a company expands into other areas of its sector, for example, a manufacturing company owning one of its suppliers or distributors. (See horizontal integration) | N5 |
| Vulture funds | funds that are specialised in acquiring distressed companies | N5 |
| VDD/Vendor (initiated) Due Diligence | a due diligence investigation conducted by an independent party, often an audit firm or law firm, with which the initial client is the seller. After the closing of the transaction, the provider of the due diligence is accountable to the buyer | N4 |
| Vendor loan/Vendor note | if the seller allows spread payments, it implicitly grants a loan (vendor note or vendor loan) to the buyer | N4 |
| Venture Capital | this term is used for all investment funds. However, to make a clear distinction between investment funds active in start-ups or technologically uncertain companies and investment funds active in mature cash flow generating companies, the term venture capital is being used to indicate the first type of investment funds to an increasing extent. Buy-out funds and private equity relate to the second type of investment funds | N4 |
| Vulture funds | funds that are specialized in acquiring distressed companies | N4 |
| Vendor due diligence | A due diligence report on the Target, ordered by the Seller. The advantage of using a VDD (Vendor Due Diligence), is that the seller has more ownership over what’s being commicated, and how it is communicated. In some cases, sellers will first prepare for an exit, before commissioning such a report. The report is then handed to a shortlist of Acquirers | N3 |
| Venture capital | Venture capital (VC) is money that is provided to seed early-stage, emerging and emerging growth companies. Venture capital funds invest in companies in exchange for equity in the companies they invest in, which usually have a novel technology or business model in high technology industries, such as biotechnology and IT. The typical venture capital investment occurs after a seed funding round as the first round of institutional capital to fund growth (also referred to as Series A round) in the interest of generating a return through an eventual exit event, such as an IPO or trade sale of the company. Venture capital is a type of private equity. In addition to angel investing, equity crowdfunding and other seed funding options, venture capital is attractive for new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering. In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, venture capitalists usually get significant control over company decisions, in addition to a significant portion of the companies’ ownership (and consequently value). Venture capital is also a way in which the private and public sectors can construct an institution that systematically creates networks for the new firms and industries, so that they can progress. This institution helps identify and combine business functions such as finance, technical expertise, marketing know-how, and business models. Once integrated, these enterprises succeed by becoming nodes in the search networks for designing and building products in their domain. However, venture capitalists’ decisions are often biased, exhibiting for instance overconfidence and illusion of control, much like entrepreneurial decisions in general | N3 |
| Vertical merger | This would give backward integration to the company to assimilate the sources of supply and forward integration towards the market. ie, the merging undertaking would be a buyer or a supplier using its product as intermediary material for final production | N3 |
| Voluntary winding up | The original company which has split into several companies after division, could be wound up voluntarily | N3 |
| Vulture fund | A vulture fund is a hedge fund or private equity fund that invests in debt considered to be very weak or in imminent default, known as distressed securities.[1] Investors in the fund profit by buying debt at a discounted price on a secondary market and then using numerous methods to gain a larger amount than the purchasing price. Debtors include companies, countries, or individuals. Vulture funds have had success in bringing attachment and recovery actions against sovereign debtor governments, usually settling with them before realizing the attachments in forced sales. Settlements typically are made at a discount in hard or local currency or in the form of new debt issuance. In one instance involving Peru, such a seizure threatened payments to other creditors of the sovereign obliger. | N3 |
| Value Added Tax | a tax on supplies of goods and services. Typically, finance transactions and transactions relating to the granting of credit are often exempt from VAT. As a consequence, the supplier is restricted in its ability to reclaim VAT which it has itself incurred on supplies made to it. 1. (HKG) use of the term refers to the same concept but Hong Kong itself does not levy Value Added Tax | N1 |
| Van Gorkom | see Duty of Care | N1 |
| VAT | acronym for Value Added Tax | N1 |
| VC | acronym for Venture Capital or Venture Capitalist, as the case may be | N1 |
| VCOC | acronym for Venture Capital Operating Company, a type of operating company which satisfies requirements under the ERISA plan asset regulations | N1 |
| VCOC Rights | certain Mezz Lenders are funds which have significant US pension plan Investors. In order to avoid issues under ERISA for these Investors, the Mezzanine Financing needs to qualify for an exemption from ERISA. The most commonly used exemption in these situations is to structure the Mezzanine Financing as an investment in a VCOC, achieved by giving VCOC Rights to these Mezz Lenders in a VCOC Side Letter. What are these rights? Well, they are direct contractual rights between the Mezz Lender and the Borrower/operating company that provide the Mezz Lender with enhanced “management rights” providing the Mezz Lender with a right to substantially participate in or substantially influence the Management of the Borrower/operating company. In practice, this typically requires the Mezz Lender to obtain the following three rights: (i) Board Observer rights; (ii) the right to receive more information than is required by the terms of the Credit Agreement; and (iii) the right to consult with Management. | N1 |
| VCTs | acronym for Venture Capital Trusts, specialist investment trusts, which offer tax advantages to Investors willing to provide money for investment in unquoted companies | N1 |
| VDD | acronym for Vendor Due Diligence | N1 |
| VDR | acronym for Virtual Data Room | N1 |
| Vendor | party that wishes to sell the Shares or business of an entity in which it is a shareholder. Vendors may hold minority or majority interests in the Target and can take the form of a Parent company, owner/manager, trust vehicle or, other corporate or individual shareholders. | N1 |
| Vendor Due Diligence | a Due Diligence which is initiated by the Seller; often in order to learn about its own company and to save the potential Purchasers’ costs and expenses | N1 |
| Vendor Finance | also known as “Seller Capital.” Where a Vendor invests in the purchase of its own Target Company by way of a subordinated loan to the Acquirer or, by subscribing to Shares. Vendor Finance is usually provided to assist the Acquirer in raising the required consideration for the Target. The Vendor may structure a loan-based Vendor financing arrangement by charging interest on the loan or, such that the Acquirer’s repayment of the loaned amount represents Deferred Consideration for its purchase of the Target. The structure of the investment can depend on the Acquirer’s risk profile and deal-specific tax considerations. | N1 |
| Venture Capital | risk capital in the form of equity and/or loan capital which an investment institution provides to back a business venture which is expected to grow in value | N1 |
| Venture Capitalist | person or investment firm that provides early stage funding to a company in return for an Equity Interest. Often Venture Capitalists will bring technical or other expertise to the company. Irreverently sometimes referred to as vulture capitalists on the basis VCs may take a large equity position for a relatively low price. See also Angel Investor and VC. | N1 |
| Verification | process undertaken to verify that information contained in a Prospectus or admission document is true, accurate and not misleading, thereby minimizing the directors’ risk of potential criminal or civil liabilities. The Verification notes or a Verification memorandum will take the form of questions and answers, for which the directors and Management accept ultimate responsibility when they sign. The responses to the Verification questions should be given by reference to authoritative sources and copies of those sources should be retained in a Verification file kept by the company. | N1 |
| Vesting | technique commonly used in relation to Stock Options / Share Options, whereby the rights to exercise the Options are released to the beneficiary in a staggered manner, becoming exercisable at certain points over a particular Vesting period after the Options have been granted | N1 |
| Veto Right | term often used to describe minority shareholder protection provisions contained in a company’s Articles of Association and/or the Shareholders Agreement. These reserved matters may be subject to Supermajority approval at the Board and/or shareholder level of a company. See also Blocking Right. | N1 |
| VGO | acronym for Voluntary General Offer | N1 |
| Virtual Bid | potential Bid to acquire a company, announced by a potential Offeror. Within 28 days of a potential Offeror making a Virtual Bid relating to a Takeover that will be subject to the City Code, a potential Offeror must announce whether or not it has a firm intention to make a formal Bid. See 28 Day Rule. | N1 |
| Virtual Data Room | Data Room that consists entirely of documents in digital format. A number of providers have developed software for the creation and operation of Virtual Data Rooms. Virtual Data Rooms have become ubiquitous and increasingly Data Rooms rely less and less on hard copies of the relevant documents. | N1 |
| Voluntary General Offer | another name for Voluntary Offer | N1 |
| Voluntary Offer | under Rule 10 of the City Code and Rule 15.1 of the Singapore Takeover Code, a Voluntary Offer is a Takeover Offer for a company’s voting Shares made by a person when he/she has not incurred an obligation to make a Mandatory Offer. A Voluntary Offer must be conditional upon the Offeror receiving acceptances in respect of voting rights which, together with voting rights acquired or agreed to be acquired before or during the Offer, will result in the Offeror and person Acting In Concert with it holding more than 50 percent of the voting rights. In addition, a Voluntary Offer must not be subjected to conditions whose fulfillment depends on the subjective interpretation or judgment by the Offeror or which lies in the Offeror’s hands. 1. (HKG) similar concept exists under the HK Takeovers Code, and the terms General Offer, GO, Voluntary General Offer or VGO are also used | N1 |
| Voluntary Winding Up | a non-court based procedure to wind up a company in Hong Kong, where the shareholders of a company resolve to wind up a company without a court order or where the directors resolve to wind up a company under the Companies Ordinance (see Section 228A Winding Up) | N1 |
| Voting Agreement | another name for a Support Agreement. See also Irrevocable Undertaking. | N1 |
| VWAP | acronym for Volume Weighted Average Price or the result of a formula used by market participants to calculate a type of average price at which an equity Security trades over a period of time | N1 |
Reference
N1: referring to The Book of Jargon – Global Mergers & Acquisitions, first edition, the Latham & Watkins, available at https://www.lw.com/admin/Upload/Documents/BoJ_Global_MandA-locked-March-2015.pdf.
N2: referring to Glossary of Key M&A and Corporate Terms, 4th edition, Dr Anne Meckbach and Dr Tobias Grau, available at https://cms.law/en/deu/publication/glossary-of-key-m-a-and-corporate-terms-2020.
N3：referring to M&A Dictionary, Global PMI Partners, available at https://gpmip.com/dictionary/.
N4：referring to M&A jargon demystified, KPMG, available at https://issuu.com/kpmg_be/docs/kpmg_m_a_vakjargon_en_digital.
N5: referring to Simple Guide to M&A Terminology and Jargon, Lucas & Weston Ltd., available at https://uploads-ssl.webflow.com/5708da760dd2dc033a78bd13/5b7ea45f3dbc72645fbee4b2_L%26W%20-%20M%26A%20Glossary.pdf.
N6：referring to INVESTMENT DICTIONARY, MARSH & McLENNAN COMPANIES, available at https://www.mercer.com/content/dam/mercer/attachments/europe/Netherlands/ic-dictionary-mercer.pdf.
N7: referring to International Valuation Glossary—Business Valuation, November 2021, jointly published by ASA, CBV Institute, RICS and TAQEEM, available at https://www.appraisers.org/docs/default-source/default-document-library/international-business-valuation-glossary_en_final.pdf?sfvrsn=e37c69d4_2.
The above information is collected from the Internet and reorganized for the purposes of learning and sharing only and not for any other purposes. It can not be guaranteed to be error-free.