Deal Structure Isn't Boilerplate

Two buyers can pay the same multiple for what looks like the same target and walk away with completely different risk. The difference usually isn't in the price. It's in the structure, and structure is where most of the real negotiating happens, long after the headline number is agreed.

Asset Purchase (APA) vs. Share Purchase (SPA) agreements

These aren't interchangeable legal formalities; they allocate risk differently on almost every dimension that matters.

On liability, an APA lets the buyer cherry-pick assets and leave known and unknown liabilities, litigation, legacy debt, environmental exposure, with the seller. An SPA means the buyer inherits everything by default, mitigated only through reps and warranties, indemnities, or W&I insurance. For asset-heavy targets with real environmental or decommissioning exposure, an APA is often non-negotiable regardless of price.

On contracts and permits, an APA can require long-dated concessions, land rights, grid connections and licenses to be individually reassigned, third-party or regulatory consent that can stall or kill a timeline. An SPA carries these over automatically, since the legal entity itself is unchanged. This is, in my experience, the number one reason asset-heavy deals default to SPA structures even when liability protection would argue for an APA.

On tax basis, an APA gives a stepped-up basis, a fresh depreciation and amortization shield. An SPA carries the historic basis forward: a potentially smaller future shield, but it avoids transfer taxes on re-titling assets. The right move is to model both bases explicitly, the "cheaper" structure on paper can flip once transfer tax and the step-up's net present value are properly netted out.

Employee transfer and closing timeline follow the same logic. An APA often means re-hiring staff, which can reset seniority and benefits, plus a longer close since consents and re-assignment work take time. An SPA keeps employment unchanged and typically closes faster and cleaner.

Valuation lens: asset-heavy vs. asset-light business models

The structuring decision doesn't stop at APA vs. SPA, how you value and model the target shifts just as much depending on what kind of business it is.

Asset-heavy businesses typically run a lower hurdle rate (WACC + 2-4%) because cash flows are stable and often contracted, and they support more acquisition debt since there's hard collateral to lend against. Interest coverage, payback period and FCFF ratios become the load-bearing metrics.

Asset-light or software businesses skew the other way: WACC + 10%+ is common given higher execution and market risk, financing skews toward costlier equity, and ARR/NRR matter more than EBITDA multiples, especially pre-scale. Geography adds a further layer on top of this: the riskier the geography a deal sits in, the higher the WACC climbs, regardless of business model.

EBIT vs. EBITDA is a judgment call, not a formality, for asset-heavy businesses, EBIT (which approximates real, recurring maintenance capex) is usually the more honest number; EBITDA alone can be a "value trap." For asset-light businesses, EBITDA is generally fine, since capex and D&A are largely immaterial to the picture. Maintenance capex should be modeled as its own line for asset-heavy targets; for asset-light targets, burn rate and runway matter more.

Projection horizons differ too, asset-heavy models often run 10+ years to capture a full replacement/capex cycle, while 5 years is usually enough for asset-light businesses once growth normalizes.

And a business that's EBITDA-negative post-funding reads very differently depending on which camp it's in: for an asset-heavy business it's a bigger red flag, since fixed asset carrying costs don't scale down and lenders want visibility on debt-service coverage; for an asset-light business it can be entirely legitimate, provided unit economics are already positive and the funding maps to a credible 12-18 month runway to breakeven.

Two more nuances worth flagging

Regulatory and permitting diligence is effectively its own workstream for asset-heavy deals, build it into the timeline and define no-go criteria explicitly. It's usually lighter for asset-light and tech targets, where data and privacy diligence matters more instead: every IP asset, domain and dataset needs to be individually assigned if the deal is structured as an APA, or it stays with the seller, and moving customer data can trigger fresh privacy consent requirements that catch teams off guard late in the process.

Either way, remember what the board is actually buying: asset-heavy boards want downside protection, a replacement-cost floor, tangible collateral. Asset-light boards want to see the moat and the retention economics, NRR, churn, sitting alongside the growth story.

Every deal differs; treat this as a starting checklist, not a substitute for tailored diligence and structuring work.