Is restricted cash part of cash at closing (I.e., should it increase the company value)? Don’t think so but figured to double check

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It decrease cash balance (increases to net debt and decrease to overall value of the company). However, I have seen it treated different ways depending on partner preference so someone feel free to correct me if I’m wrong.

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Formally restricted cash has to stay in the business. Most common treatment in an spa is treating it as a reduction of cash (if within cash) or specifically called out as something not included in the definition of cash retained by sellers. End of day it should be value neutral.

Informal “restricted” cash is a negotiation point - think things like cash taxes on cash repatriation. Most typically see things like this get called out as debt

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I would say if it is cash free debt free, will treat it as debt like for sure. So EY 1 treatment is most common

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Assuming restricted cash was recorded as part of cash, I’ve always seen it as a reduction from cash in arriving at net indebtedness and before listing out any debt-likes.

What is the restricted cash attached to?

Approach so far has always been to decrease the amount of cash in net debt by the amount of cash restricted

Depending on nature of the restricted cash, could also be WC implications as well

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