What are add backs to ebitda?

Add backs or adjustments to ebitda are shown in the Information Memorandum (IM). These items are typically listed in the section within the IM which is entitled “Adjustments to ebitda” or “Ebitda calculation” or similar.

Add backs can take a number of forms, as follows:

• Items which are classed as being personal to the current owners of the business but not necessarily items which a new owner would incur on taking over ownership of the business. For example, these include pension contributions for directors, healthcare costs, costs of personal motor vehicles, salaries for additional/non-working family members, purchase of personal items, one-off expenditure, etc.
• Non cash items. These are specifically amortisation of goodwill and depreciation costs. Both of these also need to be added back to Operating Profit as they are merely acco