Debt-like items are liabilities or commitments that, without being financial debt in the strict sense, are treated as such in the bridge from enterprise value to the equity price. They reduce the price accruing to the seller accordingly.

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In financial due diligence, their identification is a major negotiation issue: pension provisions, restructuring commitments, declared but unpaid dividends, deferred tax, earn-outs due, under-investment. Their scope is hotly debated in the price mechanism (locked-box or completion accounts).

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Example: a target shows net financial debt of CHF 4.0 million, to which due diligence adds CHF 1.2 million of debt-like items (an understated pension provision and a restructuring bonus), bringing the total deduction to CHF 5.2 million in the equity price calculation.

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At Hectelion, we identify and quantify debt-like items in due diligence to secure the bridge from enterprise value to the equity price.