Fig. 01 · Glossary
EBITDA Add-Back
Also known as Add-Back, Adjusted EBITDA Add-Back
Definition
An EBITDA add-back is a proposed adjustment to reported EBITDA for expenses that should not recur under buyer ownership. Common examples include one-time legal fees, transaction costs, owner compensation above market, restructuring expenses, and unusual professional fees. Buyers reject add-backs when the cost is recurring, poorly documented, or necessary to operate the business.
The add-back argument is won before the data room opens. If the company cannot document amount, timing, owner, business rationale, and non-recurring nature, the buyer will treat the adjustment as seller optimism.
In practice, the best add-back work is cleanup work: recurring expenses recoded correctly, owner costs normalized, and accounting policy documented well before LOI.
Human Renaissance glossary · operator-grade definitions · Research methodology
