Package 5: Merger Modeling Topics

Our merger modeling topics introduce critical skills required for understanding how to structure and analyze mergers & acquisitions. After modeling a company's profits / cash flow and valuing the entity, one must decide what to do with the company in the grand scheme of its strategic alternatives, including a merger or acquisition. We introduce the basics of deal structuring and implications on accretion/dilution to building more involved merger models with the complexity of complicated FASB and IFRS accounting rules.

Courses

Last 10 posts

"Share Repurchases" video online at www.wstselfstudy.com under FREE EXHIBITS
Hi In the last Q&A you refer to the free "Share Repurchases" video online at www.wstselfstudy.com under FREE EXHIBITS to have a better understanding of the opportunity cost of funding Capital structure components. I can`t find the video. Could you please help? Thank you
Go to post added 4 years ago
Marginal Interest Rate (A/D Analysis example)
Where specifically do you get the Marginal Interest Rate (is it savings rate, or treasury?) from, especially in the current low interest rate environment?
Go to post added 5 years ago
Merger Modeling Basics: EPS x Net Income
Hi, I have a doubt in relation to EPS and Net Income used in the model: why does the instructor mention that the multiplication of the EPS by the # of diluted shares outstanding to come to the Net Income is not accurate/precise? Also, if we are building a stand alone DCF valuation model that may ... Read More
Go to post added 7 years ago
Merger Modeling Basics: Synergies and Cash PE question
Hi there, Here is my question: Why are we calculating the Purchase price (Equity Value) in this model based on the target's Net Income affected by synergies? If we look at the Accretion / Dilution model, we calculated the implied PE based on the Purchase price and target's EPS (without any synerg... Read More
Go to post added 7 years ago
Tax implications on Cash vs Stock deal
Do Stock deals enjoy a distinct financial advantage over cash deals due to U.S. tax policy (since stock-for-stock deals are not considered taxable events)? If so, what are the tax implications of stock vs. cash (besides the fact that cash clearly has forgone interest income or the interest expense f... Read More
Go to post added 7 years ago
Merger Modeling Basics: Synergies and Cash PE question
Hi there, Here is my question: Why are we calculating the Purchase price (Equity Value) in this model based on the target's Net Income affected by synergies? If we look at the Accretion / Dilution model, we calculated the implied PE based on the Purchase price and target's EPS (without any synerg... Read More
Go to post added 7 years ago
Merger Modeling Basics: Amortization
Hi, I was analysing the ability to pay model once more and came out with the following doubt: in theory, our sensitivity table shows how much I can afford to pay at a given Pre-tax cost of debt and a given level of synergy, however I simulated one $ amount from that table and got a dilution in my... Read More
Go to post added 7 years ago
Merger Modeling Basics: Questions on Merger model
Hi, I have a couple of questions in relation to this module that I will need your assistance to understand: (1). I'm confused with the GW calculation. In our "Accretion Dilution Model" we did it one way (P. price - book value). While in this module, we did: P. price - book value + transaction fee... Read More
Go to post added 7 years ago
Merger Modeling Basics: 338(h)10 election
Hi there, In a 338(h)10 election deal structure, where we don't need to amortize the "GW" but we still have the tax credit, should we apply the tax credit to the difference between Purchase Price - Book Value ONLY, or the tax credit goes over Purchase Price - Book Value + Transaction fees? In oth... Read More
Go to post added 7 years ago
Identifiable Intangible Assets
My video for the M&A package has expired so I'm just going off of what I have in my notes and in the Pepsi/Molson M&A excel model. It seems the differentiating factor between Tax Deductible and Non-Tax Deductible Intangibles is whether the asset has a finite or infinite life. Separately, I w... Read More
Go to post added 7 years ago