Equity Value
The value of the shareholders' stake in a business, derived by subtracting net debt from enterprise value.
Also known as: Market capitalisation (listed), Equity consideration
One-line definition
Equity Value is what the shareholders actually receive in a sale — Enterprise Value minus all debt-like obligations plus cash.
Formula
Equity Value = Enterprise Value − Net Debt at closing ± NWC adjustment
TS relevance
Because TS teams define Net Debt and NWC adjustments, they directly determine Equity Value at closing. A €5m debate on debt-like items is a €5m difference in seller proceeds.
Related terms
Enterprise Value (EV)
The total value of a business, representing what a buyer pays for 100% of the company on a cash-free, debt-free basis.
Net Debt
The gap between Enterprise Value and Equity Value in a deal — gross debt minus cash, plus a long list of debt-like items.
Bridge from EV to Equity Value
The waterfall of adjustments — primarily net debt and working capital — that converts Enterprise Value into the actual equity price paid at closing.