More on exit adjustments and the impact of cash holdbacks and escrows.
Module Category: M&A and Transaction Adjustments
Key Concept: Cash holdbacks and escrows cause a certain portion of exit proceeds to remain unrealized for months or years after a company is sold. Because unrealized fair market values change over time, so do the underlying metrics and results of value creation models. The value creation story will not be finalized until the last escrow dollar is released.