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  • M&A - Last Year Paper

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    Chetan Brahmankar
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    Projected P&L Year Sales cost of goods sold EBIDTA Depreciation EBIT Tax PAT GFA Accumulated Depreciation Net Fixed Assets Net Working Capital Incremental WC Capex Growth rate after 7 years (g) = 3% cost of capital (k) = 9% FCF Discount factor for 9% Total Long term Debt value of equity EPS 3. 3. 4. Market Price 52. 26. 70. PE ratio 15 7. 15.

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    Projected P&L Year Sales cost of goods sold EBIDTA Depreciation EBIT Tax PAT GFA Accumulated Depreciation Net Fixed Assets Net Working Capital Incremental WC Capex Growth rate after 7 years (g) = 3% cost of capital (k) = 9% FCF Discount factor for 9% Total Long term Debt value of equity EPS 3. 3. 4. Market Price 52. 26. 70. PE ratio 15 7. 15.

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    Attribution Non-Commercial (BY-NC)
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    23 views11 pages

    M&A - Last Year Paper

    Uploaded by

    Chetan Brahmankar
    Projected P&L Year Sales cost of goods sold EBIDTA Depreciation EBIT Tax PAT GFA Accumulated Depreciation Net Fixed Assets Net Working Capital Incremental WC Capex Growth rate after 7 years (g) = 3% cost of capital (k) = 9% FCF Discount factor for 9% Total Long term Debt value of equity EPS 3. 3. 4. Market Price 52. 26. 70. PE ratio 15 7. 15.

    Copyright:

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    of 11

    Projected P&L

    Year 0 1 2 3 4 5
    Sales 83.60 89.45 95.71 102.41 106.51 110.77
    74.00 74.25 74.50 74.75 75.00
    cost of goods sold 63.10 66.19 71.07 76.30 79.62 83.08
    EBIDTA 20.50 23.26 24.65 26.12 26.89 27.69
    Depreciation 3.30 9.90 10.60 11.30 11.80 12.30
    EBIT 17.20 18.20 19.20 20.20 21.20 22.20
    Tax 6.02 6.37 6.72 7.07 7.42 7.77
    PAT 11.18 11.83 12.48 13.13 13.78 14.43

    GFA 95.00 109.60 125.10 141.80 156.80 172.40


    Accumulated Depreciation 29.00 38.90 49.50 60.80 72.60 84.90
    Net Fixed Assets 66.00 70.70 75.60 81.00 84.20 87.50
    Net Working Capital 11.10 11.60 12.40 13.30 13.90 14.40
    Incremental WC 0.50 0.80 0.90 0.60 0.50
    Capex 14.60 15.50 16.70 15.00 15.60

    Growth rate after 7 years (g) = 3%


    Cost of capital (k) = 9%

    FCF 6.63 6.78 6.83 9.98 10.63

    Discount factor for 9% 0.917 0.842 0.772 0.708 0.65

    PV 6.08 5.71 5.27 7.07 6.91

    Total 152.41

    Long term Debt 36.00

    Value of equity 116.41

    Share Price 77.61


    6 7
    115.20 118.66
    75.25 75.50
    86.69 89.59
    28.51 29.07
    12.70 13.10
    23.20 24.20
    8.12 8.47
    15.08 15.73

    188.60 204.50
    97.60 110.70
    91.00 93.80
    15.00 15.40
    0.60 0.40
    16.20 15.90

    10.98 12.53 215.10

    0.596 0.547 0.502

    6.54 6.85 107.98


    Solid Co. Ltd.
    Solid Co. Ltd. Float Co. Ltd (Post-merger)
    EPS 3.5 3.5 4.7
    Market Price 52.5 26.25 70.0
    PE ratio 15 7.5 15.0
    Number of shares 150000 150000 225000
    Total Earnings 525000 525000 1050000
    Total Market Value 7875000 3937500 15750000
    Particulars Big Fish Small Fry (BV) Small Fry
    (FMV)
    Fixed Assets 820 560 750
    Current Assets 330 270 270

    Total Assets 1150 830 1020


    Share Capital (Face
    value Rs. 1 each) 800 700
    R&S 350 130

    Total Liabilities 1150 830

    Current market price of A 175

    Calculation of goodwill

    FMV of equity of Small Fry 1020


    FMV of Small Fry per share 1.46
    Goodwill per share 173.54
    Goodwill 121480
    Post Merger B/S
    Particulars Big Fish
    (Purchase Method)
    Fixed Assets 1570
    Current Assets 600
    Goodwill 121480
    Total Assets 123650
    Share Capital
    (Face value Rs. 1 each) 1500
    R&S 350
    Share Premium 121800
    Total Liabilities 123650
    Particulars A T(BV) T(FMV) Pulling of interest
    Current Assets 2.5 0.87 0.94 3.37
    Fixed Assets 7.25 1.39 1.98 8.64

    Total Assets 9.75 2.26 2.92 12.01


    Other Liabilities 2.9 0.79 0.74 3.69
    Share Capital (Face
    value Rs. 10 each) 4 0.96 4.96
    R&S 2.85 0.51 3.36

    Total Liabilities 9.75 2.26 12.01

    2.18
    current market price of A 35

    Calculation of goodwill

    FMV of equity of T 2.18


    FMV of T per share 22.71
    Goodwill per share 12.29
    Goodwill 1.18
    Purchase Method
    3.44
    9.23
    1.18 Goodwill
    13.85
    3.64

    4.96
    2.85
    2.4 Share Premium
    13.85
    Without
    with synergy
    Relaible Safex Synergy
    Sales 8000 4000 12000 12000
    COGS 6000 2400 8400 7800
    EBIT 2000 1600 3600 4200
    Tax(50%) 1000 800 1800 2100
    PAT 1000 800 1800 2100
    Expexted Growth rate 4% 6% 4% 4%
    CoC 9% 10% 9% 9%

    Value 37440 43680


    a)
    Company A Company T Post Merger
    PAT 20000 5000 25000
    No of shares 5000 2000 1166.67 6166.67
    Market price 60 35 1.71

    EPS 4 2.5 4.05


    PE 15 14
    b)
    Company T Post Merger
    5000 25000
    2000 1500.00 6500.00
    45 1.33

    2.5 3.85
    18
    Items Rs/share Stock price
    EPS 1.95 35.61
    Cash flow per share 4.12 31.81
    BV per share 12.15 30.42
    Sales per share 18.11 32.51
    32.59

    Items Company1 Company2 Company3


    Stock price 20 32 16
    EPS 1 1.82 0.93
    Cash flow per share 2.55 3.9 2.25
    BV per share 6.87 12.8 7.62
    Sales per share 12.62 18.82 7.62

    PE 20.00 17.58 17.20 18.26


    Stock price / cash flow 7.84 8.21 7.11 7.72
    SP/BV 2.91 2.50 2.10 2.50
    SP/Sales 1.58 1.70 2.10 1.79

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