M&A and LBO Modeling Topics
Topics related to M&A and deal structuring as well as LBO and related modeling techniques
Subtopics
Last 10 posts
Comps when valuing a company for M&A
Hi, thanks again for answering all of our questions! When spreading comps to perform a comps analysis (not precedents) for the purpose of valuing a company for a take-private, should you still use options exercisable instead of outstanding (even though you would expect all of the options outstanding... Read More
Hi, thanks again for answering all of our questions! When spreading comps to perform a comps analysis (not precedents) for the purpose of valuing a company for a take-private, should you still use options exercisable instead of outstanding (even though you would expect all of the options outstanding... Read More
Asset Acquisition: Customer Relationship
Our company is currently acquiring assets of a target company. We intend to acquire specifically, (1) PPE's and (2) customer database. For PPE, we hired a third-party service provider to appraise. For the latter, I used discounted cash flow method, valuation is for 10 years. However, my initial mode... Read More
Our company is currently acquiring assets of a target company. We intend to acquire specifically, (1) PPE's and (2) customer database. For PPE, we hired a third-party service provider to appraise. For the latter, I used discounted cash flow method, valuation is for 10 years. However, my initial mode... Read More
Off-balance sheet Inventory Financing
How to account for off-balance sheet crude inventory financing in calculating initial investment in project IRR? Do we include or exclude the amount? If exclude, the Project IRR seems artificially high. If include, the Project IRR seems artificially low and negative.
How to account for off-balance sheet crude inventory financing in calculating initial investment in project IRR? Do we include or exclude the amount? If exclude, the Project IRR seems artificially high. If include, the Project IRR seems artificially low and negative.
Acquisition of assets
Would purchase price for the acquisition of assets normally include or exclude "inventory" since these are mostly spare parts of the main assets? or is it really a deal specific and normally a negotiating point whether to separate pay for the spare parts?
Would purchase price for the acquisition of assets normally include or exclude "inventory" since these are mostly spare parts of the main assets? or is it really a deal specific and normally a negotiating point whether to separate pay for the spare parts?
JCP LBO Template
In the JCP LBO template self-study, Long Term debt on the balance sheet is linked from the debt sweep (I77), which includes preferred debt along with senior unsecured debt. Should preferred debt notional always be included in that manner or should it be included in shareholders equity? For the JCP... Read More
In the JCP LBO template self-study, Long Term debt on the balance sheet is linked from the debt sweep (I77), which includes preferred debt along with senior unsecured debt. Should preferred debt notional always be included in that manner or should it be included in shareholders equity? For the JCP... Read More
Reverse Morris Trust (RMT)
I have a question regarding this type of M&A structure. What is the profile of the acquirer and target that makes this work, what makes it not work? Why would a company choose this structure over others out there and what are the key financial/valuation metrics to focus on to determine whether a RMT... Read More
I have a question regarding this type of M&A structure. What is the profile of the acquirer and target that makes this work, what makes it not work? Why would a company choose this structure over others out there and what are the key financial/valuation metrics to focus on to determine whether a RMT... Read More
Synergies/(Cushion) to break even
I just have a conceptual question on synergies and cushion to break even in an accretion dilution model. What does a positive number (synergies) to break even mean and what does a negative number (cushion) to break even mean? Does this mean that I will need X $ of synergies to make up for the premiu... Read More
I just have a conceptual question on synergies and cushion to break even in an accretion dilution model. What does a positive number (synergies) to break even mean and what does a negative number (cushion) to break even mean? Does this mean that I will need X $ of synergies to make up for the premiu... Read More
Adv LBO Model
How do you calculate Cumulative Debt Paydown as well as Cumulative % of initial Debt Paid in the Credit and Leverage Statistics in the model. thank you.
How do you calculate Cumulative Debt Paydown as well as Cumulative % of initial Debt Paid in the Credit and Leverage Statistics in the model. thank you.
Diluted Shares Outstanding Excel Equation
I’m confused about an equation you used in the Merger Model Basics course. You calculated the “Number of Shares Equivalent” – the number of dilutive shares essentially – in the Walmart stores acquires Target accretion/dilution model using the equation =max(0,Number of Options*(1-Option Exe... Read More
I’m confused about an equation you used in the Merger Model Basics course. You calculated the “Number of Shares Equivalent” – the number of dilutive shares essentially – in the Walmart stores acquires Target accretion/dilution model using the equation =max(0,Number of Options*(1-Option Exe... Read More
Hi, can you tell me which of these should be added to basic shares outstanding when performing comps (not precedents) analysis: RSAs, PSUs, PSAs, Restricted Stock, SARs exercisable/outstanding, Directors Shares? Thanks so much!