Professional Documents
Culture Documents
Done for both acquirer and target company - Company and Opportunity Overv
Acquirer Company
Name of the company
Nature of operations
Nature of industry
SWOT Analysis
Summary - Qualitative
Analysis ( Good/ Bad?
Merger / Acquisition)
Sensitivity analysis
PV (syngergies) if it is a merge
Add increased in revenue or cost
savings of syngergy -> new value of
firm
Multiples valuation
using Revenue multiple, EBIT multiple
and EBITDA multiples to calculate
firm's value
forecast WC by using percentage of WC/EBIT
ompany - Company and Opportunity Overview
Target Company
uantitative Analysis
Year 1 Year 2 Year 3
Revenue
Expenses (excluding Depreciation & Amortization)
EBITDA
Depreciation & Amortization
EBIT (operating Profit)
Interst Expense
EBT
NOPAT or EBIT*(1- Tax rate)
Plus Depreciation
Minus Capex
Minus change in WC
FCFF
Terminal Value
PV of FCFF (DCF)
PV of TV
Value of the firm=PV of FCFF + PV of TV
Value of Debt (if there is any debt information)
Value of firm's equity
How to calculate WACC Formulation
Beta asset of comparable companies
Firm's beta asset
Firm's beta equity Beta equity = Beta assets*(1+(D/E)*(1-tax))
Ke Ke=Rf+Be*(Rm-Rf)
We: check capital structure assumption
Wd
Kd
Tax rate tax rate =tax paid/EBT
WACC WACC=Ke*We+Kd*Wd*(1-tax rate)
Sensitivity analysis
Change ratio of Debt/Value -> change in beta equity -> change in WACC -> change in value of firm
Change the long term EBIT growth rate-> change in firm's value
PV (syngergies) if it is a merge
Add increased in revenue or cost savings of syngergy -> new value of firm
Multiples valuation
using Revenue multiple, EBIT multiple and EBITDA multiples to calculate firm's value
Year 4
ssets*(1+(D/E)*(1-tax))
Wd*(1-tax rate)