Brianna Johnson

Transferability is one of the most critical and often overlooked drivers of business value in mergers and acquisitions. At its core, transferability refers to a company’s ability to operate successfully without the current owner’s daily involvement. The more transferable a business is, the more attractive it becomes to prospective buyers.

When Jared Ribley, Founder and Managing Partner of Capstone M&A, stepped into the classroom at Washington University in St. Louis Olin Business School as a guest speaker for the ETA (Entrepreneurship Through Acquisition) program, the result was far more than a lecture, it was a defining moment for students.

When business owners think about value, they often focus on revenue and EBITDA. But in mergers and acquisitions, net working capital (NWC) can have just as much impact on deal economics, especially at closing. Net working capital represents the capital required to operate the business on a day-to-day basis. In most transactions, buyers expect the business to be delivered with a normalized level of working capital, ensuring operations can continue smoothly post-close.