Practise Model | Goodwill (Accounting) | Equity (Finance)

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Description
1) Offer Value calculation TEV Calculation: TEV= Equity Offer value plus preferred stock, minority interest, debt, less cash, equity in affiliates 2) Sources and Uses: Sources: cash, revolver, senior, sub debt, sponsors equity Uses: Purchase of equity, refinancing existing debt, financing fees, expenses - Equity value and current debt taken from step 1 3) Pro forma balance sheet Cash: original balance less source of cash, Pro forma will be minimum cash balance Valuation adjustments to PPE, intan
Transcript
  1) Offer Value calculation TEV Calculation:TEV= Equity Offer value plus preferred stock, minority interest, debt, less cash, equity in affiliates 2) Sources and Uses: Sources: cash, revolver, senior, sub debt, sponsors equityUses: Purchase of equity, refinancing existing debt, financing fees, expenses- Equity value and current debt taken from step 1 3) Pro forma balance sheet Cash: srcinal balance less source of cash, Pro forma will be minimum cash balanceValuation adjustments to PPE, intangibles etc Goodwill Calculation Purchase of EquityLess: Book Value AcquiredPlus: Existing GoodwillPlus: Transaction Expenses = Total Goodwill Created Less old debt, plus new debt from sources and usesLess old equity, plus new equity from sources and uses 4) working capital table A/R, A/P, I/P, Accrued liabilities, accrued taxesCalculate increase/ decrease in NWC 5) D&A Tables amount of D&A spend (i.e capex or additions to intangibles as % of sales)Calculate Depreciation (as % of capex)Amortization of definite life intangiblesEnding balance  Sources and UsesSources: Current Share Price$18.47CashOffer Premium10%RevolverOffer Price $20.32 Senior Term LoanShares Outstanding ('000) 143.78 Subordinated debtEquity Value $2,921.11 Sponsors EquityLess: Option Proceeds Total SourcesOffer Value $2,921.11 Uses Debt 1,034.98 Refinancing existing debtPreferred0.00Purchase of EquityMinority Interest 5.91 Financing Fees 2%Less : Equity and affiliates Transaction Expenses 1%Less: cash 51.53 Total Uses: TEV $4,013.53Current Shares Outstanding 100,000.00Options Outstanding 0Diluted Shares Outstanding 100,000.00 Summary Financial Ratios EBITDA 492 EBITDA / InterestEBITDA-CapEx / InterestSenior debt / EBITDATotal debt / EBITDA% of equity to book capital  assumptions41.531049219842147631,050.81 4,044.34 1,034.982,921.1159.04$29.21 4,044.34  12/30/07 Adjustments Cash$51.5 ($51.5) 10 Accounts receivable437.9Inventories26.9Other current assets55.8 572.1 PP&E, net1,468.0Definite life intangibles56.8Indefinite life intangibles71.7Goodwill683.4 (683.4) $2,655.56 Equity in affiliates137.8Other long-term assets483.2Deferred financing fees0.0 59.04$3,473.1 Accounts payable$202.9Accrued liabilities335.4Accrued income taxes81.1 619.5 Existing long-term debt1,035.0 (1,035.0) Revolver0.0 492.0 Senior Term Loan0.0 984.0 Subordinated debt0.0 1,476.0 Pension & postretirement benefits obligations495.0Other long-term liabilities339.5 2,489.0 Minority interest5.9Total Equity978.2 (978.2) $1,050.81Equity + Liabilities $3,473.1 Check0.000 
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