Adjust exit metrics for prior distributions generated from operating cash flows or the sale of assets.
Module Category: M&A and Transaction Adjustments
Key Concept: When portfolio companies distribute equity to shareholders during a holding period, it changes the value creation ending point. Effective Exit metrics must represent a combination of the company’s capital structure at exit and the impact of preceding equity outflows. The mathematics of this combination depend on whether a distribution is generated from cash on the company’s balance sheet or the disposition of assets.