"DCF, LOI, SPA, EV, NBIO — what are you actually talking about?" A business sale draws heavily on M&A terminology (M&A itself stands for "Mergers & Acquisitions"), and the abbreviations can seem overwhelming if you encounter them for the first time. Here's a combined glossary of the ones you'll most often meet.

The key documents in the process

  • NBIO (Non-Binding Initial Offer): A non-binding, initial offer from a potential buyer — often the first written indication of what terms the buyer envisions, before negotiation really begins.
  • LOI (Letter of Intent): Describes the overall framework the parties have agreed on, before the expensive due diligence process begins. See our full walkthrough of the letter of intent.
  • DD (Due Diligence): The buyer's thorough investigation of the business's finances, legal matters and operations, before the deal becomes final.
  • SPA (Share Purchase Agreement): The final, legally binding transfer agreement in a share sale. In an asset purchase, the corresponding document is often called an "Asset Purchase Agreement" (APA). See the full walkthrough of what a transfer agreement should contain.
  • IM (Information Memorandum): The formal, comprehensive sales document used in larger deals — see the full walkthrough of the Information Memorandum.
  • NDA (Non-Disclosure Agreement): The confidentiality agreement protecting sensitive information while dialogue between the parties is ongoing.

Valuation and key figures

  • DCF (Discounted Cash Flow): A valuation method calculating the present value of the business's expected future cash flows.
  • EV (Enterprise Value): The business's total value — unlike equity value, EV also accounts for the business's debt and cash. See the relationship in our article on qualitative vs. quantitative valuation.
  • EBITDA: Earnings before interest, tax, depreciation and amortization — the most common key figure to apply an industry multiple to in a valuation.

Company and structure terms

  • SME: Small and medium-sized enterprises — see the full walkthrough of what an SME is.
  • ApS/A/S: The Danish terms for a private limited company and a public limited company — the most common company forms in a share purchase. See the difference between "firma", "selskab" and "virksomhed".

Why are so many English abbreviations used in a Danish deal?

M&A as a field is internationally anchored, and much of the terminology originates from English-speaking markets — even in a purely Danish deal between two Danish parties, advisors therefore often use the English abbreviations, simply because it's the established professional terminology in the industry.

Do you need to know the abbreviations by heart yourself?

No — but it's useful to be able to look them up when you encounter them, so you quickly understand where in the process you are, and what's actually being negotiated. If you're unsure about a specific abbreviation you've encountered that isn't listed here, it's always better to ask than to pretend you understand it.

Frequently asked questions

What's the difference between an NBIO and an LOI?

An NBIO is an early, non-binding offer from the buyer — often the very first written indication. An LOI typically comes later, once the parties agree on the overall framework, and serves as the basis for the subsequent due diligence.

Are EV and the company's price the same thing?

Not necessarily. EV (Enterprise Value) is the business's total value including debt, while the price you as owner actually receive for your shares (the equity value) is typically adjusted for the business's debt and cash.

Why is the transfer agreement sometimes called an SPA and other times an APA?

SPA (Share Purchase Agreement) is used in a share sale, while APA (Asset Purchase Agreement) is used in an asset purchase. See the difference in our article on asset purchases vs. share purchases.

Encountering an abbreviation in your own sale process you can't find here? Book a no-obligation call, and we'll help translate it into plain language.

127