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Academy/ Financial Services/Glossary

Glossary for Financial Services.

Plain-language definitions of the terms you will meet.

Accredited investor: who actually qualifies — Treadstone Academy

Add-back — Treadstone Academy

Adjusted cost base — Treadstone Academy

Adjusted EBITDA vs. reported EBITDA — Treadstone Academy

Alternative minimum tax — Treadstone Academy

Amalgamation: combining two corporations into one — Treadstone Academy

Articles of incorporation: what the share structure actually authorizes — Treadstone Academy

Asset-based lending: sizing a borrowing base — Treadstone Academy

Asset purchase agreement: what stays behind — Treadstone Academy

Assignment clause: which of a target’s contracts cannot move without consent — Treadstone Academy

Bolt-on acquisition: folded into an existing platform — Treadstone Academy

Break fee: when a failed deal has a price — Treadstone Academy

Bridge financing: closing before permanent debt lands — Treadstone Academy

Bulk sales legislation: does it still apply to a Canadian asset deal? — Treadstone Academy

Business Development Bank of Canada — Treadstone Academy

Canada Small Business Financing Programme — Treadstone Academy

Capital call: funding a commitment in pieces — Treadstone Academy

Capital commitment: the pledge behind the calls — Treadstone Academy

Capital dividend account — Treadstone Academy

Capitalisation rate: turning earnings into value — Treadstone Academy

Carried interest: how a GP’s share is taxed — Treadstone Academy

Cash-flow lending: underwriting the target’s earnings — Treadstone Academy

Cash-free debt-free basis: what the price assumes — Treadstone Academy

Change of control clause: the provision an assignment clause can’t reach — Treadstone Academy

Chartered Business Valuator: what CBV certifies — Treadstone Academy

Clawback Provision: When a Manager Repays Carry — Treadstone Academy

Co-Investment Right: What an LP Actually Gets — Treadstone Academy

Comparable company analysis: limits for private firms — Treadstone Academy

Completion accounts: how the final price gets set — Treadstone Academy

Condition precedent: closing a purchase agreement — Treadstone Academy

The CIM: what it discloses, and when a buyer sees it — Treadstone Academy

Continuance under the CBCA: switching statutes — Treadstone Academy

Continuation Fund: Why a Manager Moves an Asset — Treadstone Academy

Control premium: what a buyer is really paying for — Treadstone Academy

Corporate minute book: what a gap in it actually delays at closing — Treadstone Academy

Corporate purification — Treadstone Academy

Crystallisation — Treadstone Academy

Debt service coverage ratio (DSCR) — Treadstone Academy

Deemed dividend — Treadstone Academy

Definitive agreement: what makes a deal binding — Treadstone Academy

Discharge of a security interest: clearing a target’s registry before closing — Treadstone Academy

Disclosure schedule: what it actually protects — Treadstone Academy

Discount for lack of marketability, explained — Treadstone Academy

Discounted cash flow (DCF): when it's worth building — Treadstone Academy

Dissent right: what it lets an outvoted shareholder do — Treadstone Academy

Distribution Waterfall: Deal-by-Deal vs Whole-Fund — Treadstone Academy

Distributions to paid-in capital (DPI): the metric that only counts cash back — Treadstone Academy

Dividend recapitalisation: what it is, when used — Treadstone Academy

Drag-along right: how a majority forces a clean 100% sale — Treadstone Academy

Dry Powder: Why Uncalled Capital Pressures Pricing — Treadstone Academy

Earn-out: paying more only if the target performs — Treadstone Academy

EBITDA: what it measures when a business changes hands — Treadstone Academy

EBITDA bridge: how a target's earnings get priced — Treadstone Academy

Enterprise value: what it prices before cash and debt — Treadstone Academy

Equity value: derived from enterprise value at closing — Treadstone Academy

Escrow account: who holds the money after closing — Treadstone Academy

Estate freeze — Treadstone Academy

Exclusivity period: how long should a seller grant? — Treadstone Academy

Exempt market dealer: what the registration covers — Treadstone Academy

Fair market value: how the ITA tests a related price — Treadstone Academy

A director's fiduciary duty: whose interest it protects — Treadstone Academy

Financial covenant: what a loan requires you to maintain — Treadstone Academy

Free cash flow to owner: what SDE approximates — Treadstone Academy

General Partner: Who Actually Runs a PE Fund — Treadstone Academy

General security agreement (GSA) — Treadstone Academy

GP Catch-Up: How the Waterfall's Tier Works — Treadstone Academy

Holdback: how long it stays back, and why — Treadstone Academy

Holding company: why deal-makers use one — Treadstone Academy

Indemnity basket — Treadstone Academy

Indemnity cap — Treadstone Academy

Independent Sponsor: How a Deal Gets Funded — Treadstone Academy

Indication of interest (IOI): a price, not a deal — Treadstone Academy

Interest deductibility on acquisition debt — Treadstone Academy

Intergenerational transfer rules — Treadstone Academy

Internal rate of return (IRR): why a fast exit can outscore a bigger one — Treadstone Academy

J-curve: why early fund returns look negative — Treadstone Academy

Landlord consent to assignment: why it belongs on week one of the timeline — Treadstone Academy

Letter of intent (LOI): what’s actually binding — Treadstone Academy

Leverage multiple: how much debt against EBITDA — Treadstone Academy

Leveraged buyout: where the debt sits after closing — Treadstone Academy

Lifetime capital gains exemption — Treadstone Academy

Limited Partner: What Rights an LP Actually Holds — Treadstone Academy

LPA: Which Terms Actually Matter to an Investor — Treadstone Academy

Locked-box mechanism: pricing off a fixed date — Treadstone Academy

Maintenance capex: sustaining spend vs. growth spend — Treadstone Academy

Management fee: what it pays for, and when it steps down — Treadstone Academy

Material adverse change clause — Treadstone Academy

Mezzanine debt: priced to sit behind the bank — Treadstone Academy

Minority discount: how large is it in Canada? — Treadstone Academy

Multiple arbitrage: the same earnings, a higher price — Treadstone Academy

Multiple of earnings: why a multiple prices a business — Treadstone Academy

Multiple on invested capital: what MOIC tells you — Treadstone Academy

Net benefit review — Treadstone Academy

Net working capital peg: what sets the price — Treadstone Academy

No-shop covenant: what it stops a seller doing — Treadstone Academy

Non-competition covenant — Treadstone Academy

Non-disclosure agreement: before the data room opens — Treadstone Academy

Non-solicitation covenant — Treadstone Academy

Normalisation adjustment: restating owner earnings — Treadstone Academy

Offering memorandum exemption: what it permits — Treadstone Academy

Oppression remedy: when expectations get defeated — Treadstone Academy

Paid-up capital — Treadstone Academy

Personal guarantee: when a lender still asks for one — Treadstone Academy

Plan of arrangement: the CBCA squeeze-out route — Treadstone Academy

Platform investment: the base a roll-up is built on — Treadstone Academy

PPSA registration search: reading what a target’s registry file actually shows — Treadstone Academy

Pre-emptive right, and when it actually applies — Treadstone Academy

Pre-merger notification — Treadstone Academy

Precedent transaction analysis in Canada: the data gap — Treadstone Academy

Preferred return: the hurdle before carry is paid — Treadstone Academy

Private issuer exemption: who actually qualifies — Treadstone Academy

Pro forma financial statements: what a lender wants — Treadstone Academy

Purchase price allocation: splitting land, goodwill & CCA — Treadstone Academy

Purchase price true-up: when money moves after closing — Treadstone Academy

Qualified small business corporation share — Treadstone Academy

Quality of earnings report: what it actually tests — Treadstone Academy

Recapture of capital cost allowance — Treadstone Academy

Retiring allowance — Treadstone Academy

Right of first offer vs a right of first refusal — Treadstone Academy

Right of first refusal: why it slows a share sale — Treadstone Academy

Rollover equity: why sellers keep a stake in NewCo — Treadstone Academy

Run-rate revenue: annualizing a strong month — Treadstone Academy

Safe income on hand — Treadstone Academy

SISP: the court-approved sale process in a CCAA filing — Treadstone Academy

Search fund — Treadstone Academy

Secondary sale: exiting a fund interest early — Treadstone Academy

Section 116 clearance certificate — Treadstone Academy

Section 167 GST/HST election — Treadstone Academy

Section 22 election — Treadstone Academy

Section 84.1 — Treadstone Academy

Section 85 rollover: deferring tax on a share swap — Treadstone Academy

Seller’s discretionary earnings (SDE) in Canadian deals — Treadstone Academy

Senior secured term loan: first claim on the assets — Treadstone Academy

Share purchase agreement: what the buyer inherits — Treadstone Academy

Shotgun clause: how it forces an honest price — Treadstone Academy

Stalking horse bid: the floor price in a court sale — Treadstone Academy

Subordination agreement: who gets paid first — Treadstone Academy

Survival period — Treadstone Academy

Tag-along right: the protection a minority holder gets — Treadstone Academy

Teaser document: what it says before a name gets attached — Treadstone Academy

Terminal loss — Treadstone Academy

Terminal value: the majority of a DCF, not a footnote — Treadstone Academy

Total value to paid-in capital: TVPI explained — Treadstone Academy

Trailing twelve months (TTM): pricing on now — Treadstone Academy

Unanimous shareholder agreement: what it removes — Treadstone Academy

Unitranche facility: one loan instead of two — Treadstone Academy

Vendor take-back note: the seller finances its own sale — Treadstone Academy

Virtual data room: how it's organized, and who sees what — Treadstone Academy

Warranty and indemnity insurance — Treadstone Academy

WACC: what it does to the price a fund can pay — Treadstone Academy

The Canadian benchmark

What do businesses like this one actually sell for?

Nobody publishes Canadian transaction data, so every valuation in this country quotes an American benchmark. We are building the Canadian one — multiples, asking-to-sale spreads and days on market, by sector and by city. Leave an email and you will see it first.

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