Professional Documents
Culture Documents
Ryan MacGregor
www.macabacus.com
feedback@macabacus.com
© 2014 Macabacus, LLC
Built with Macabacus Macros
DISCLAIMER
This model presents a hypothetical M&A transaction between two hypothetical companies. Any similarity between the
financial metrics of these companies and actual companies is purely coincidental. Macabacus does not provide
investment, accounting, or tax advice.
SCENARIO SELECTOR 9
Synergies
Annual revenue syergies $10.0 $10.0 $10.0 $10.0 $10.0 $10.0 $10.0 $10.0 $10.0 $10.0
COGS savings 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%
SG&A savings 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
Acquisition financing
Senior credit facility 3 $75.0 – – – – – – $75.0 $75.0 $75.0
Subordinated note 3 – – – – – – – – – –
Convertible bond 3 – – – – – – – – – –
Preferred stock 3 $125.0 – – – – – – – $125.0 $125.0
Common stock issuance $75.0 – – – – – – – – $75.0
Acquirer name BuyerCo Revenue synergies realization − first 12 months after close 50.0%
Target name TargetCo Revenue synergies realization − second 12 months after close 100.0%
Current BuyerCo stock price $31.71 COGS savings realization − first 12 months after close 50.0%
Current TargetCo stock price $9.16 COGS savings realization − second 12 months after close 100.0%
Transaction close date 6/30/13 SG&A savings realization − first 12 months after close 50.0%
Model currency USD SG&A savings realization − second 12 months after close 100.0%
Currency symbol $
Restructuring Charges
Deal Structure
Total restructuring charge (pre-tax) $200.0
Stock purchase (0=asset, 1=stock)? Yes Restructuring costs realization – at close 25.0%
Section 338 election? No Restructuring costs realization – first 12 months after close 50.0%
Carryover tax basis? Yes Restructuring costs realization – second 12 months after close 25.0%
Transaction costs expensed at close $30.0 Pro Forma Depreciation & Amortization
Minimum pro forma cash balance $1,400.0
Average interest? No Depreciation period for fixed asset write-ups (yrs) – book 7.0
Depreciation period for fixed asset write-ups (yrs) – tax 9.0
Amortization period for identifiable intangible write-ups (yrs) – book 5.0
Amortization period for identifiable intangible write-ups (yrs) – tax 15.0
Amortization period for goodwill created in deal (yrs) – tax 15.0
Page 2 of 7
Close
Asset / Liability Asset? BV at Close FV at Close FV Mark DTA Created DTL Created
PP&E Yes $51.1 $66.1 $15.0 – $5.3
Identifiable intangibles Yes – 66.8 66.8 – 23.4
[Asset 3] Yes – – – – –
[Liability 1] No – – – – –
[Liability 2] No – – – – –
[Liability 3] No – – – – –
Total – $28.6
Cash and equivalents $1,234.4 $187.3 $187.3 ($200.4) ($13.1) ($52.0) ($6.3) $73.5 $121.3 $72.8 $196.1 $1,430.5 $8.8
Accounts receivable 673.5 144.9 144.9 144.9 144.9 818.3 –
Inventory – – – – – – –
Deferred tax asset, current 129.1 9.4 9.4 9.4 9.4 138.4 –
Other current assets 143.9 8.8 8.8 8.8 8.8 152.7 –
Total current assets 2,180.9 350.3 – – – 350.3 (200.4) 149.8 (52.0) (6.3) 73.5 121.3 72.8 359.1 2,539.9 8.8
PP&E, gross 517.6 51.1 15.0 66.1 66.1 66.1 583.6 15.0
( – ) Accumulated depreciation (56.8) (13.1) (13.1) (13.1) (13.1) (69.9) –
PP&E, net 460.7 38.0 – 15.0 – 53.0 – 53.0 – – – – – 53.0 513.7 15.0
Goodwill 1,487.6 61.1 (61.1) – 275.0 275.0 275.0 1,762.6 213.9
Purchase accounting-related intangibles – – – 66.8 66.8 66.8 66.8 66.8 66.8
Other intangible assets 253.7 31.7 31.7 31.7 31.7 285.4 –
Equity investments – – – – – – –
Unearned compensation – – – – – – –
Capitalized debt financing costs – – – – 2.3 2.3 2.3 2.3
Other assets 464.0 14.3 14.3 14.3 14.3 478.3 –
Total assets $4,847.0 $495.3 ($61.1) $81.8 – $516.0 $74.6 $590.6 ($52.0) ($6.3) $75.8 $121.3 $72.8 $802.0 $5,649.0 $306.7
Shares Outstanding
Basic shares outstanding (mm) 216.443 35.340 35.340 (28.865) 6.475 6.475 222.918
Fully diluted shares outstanding (mm) 219.330 35.343 35.343 (28.868) 6.475 6.475 225.805
Check – – – – – –
Page 3 of 7
Pro Forma
x Income Statement
x Balance Sheet
x Cash Flow Statement
x Working Capital
x Equity Investments
x Debt Schedule
x Depreciation Schedule
x Amortization Schedule
x Tax Schedule
x Revenue Synergies, Cost Savings, and Restructuring Costs
x Amortization of Capitalized Debt Financing Costs
x Summary Credit Metrics
Acquirer
x BuyerCo Income Statement
x BuyerCo Balance Sheet
x BuyerCo Cash Flow Statement
x BuyerCo Working Capital
x BuyerCo Equity Investments
x BuyerCo Debt Schedule
x BuyerCo Depreciation Schedule
x BuyerCo Tax Schedule
x BuyerCo Shares Outstanding
x BuyerCo Summary Credit Metrics
Target
x TargetCo Income Statement
x TargetCo Balance Sheet
x TargetCo Cash Flow Statement
x TargetCo Working Capital
x TargetCo Equity Investments
x TargetCo Debt Schedule
x TargetCo Depreciation Schedule
x TargetCo Tax Schedule
x TargetCo Shares Outstanding
x TargetCo Summary Credit Metrics
x TargetCo Acquisition Multiple Matrix
Modified Accelerated Cost Recovery System (MACRS)
Property Class
Year 3 5 7 10 15 20
1 33.33% 20.00% 14.29% 10.00% 5.00% 3.75%
2 44.45% 32.00% 24.49% 18.00% 9.50% 7.22%
3 14.81% 19.20% 17.49% 14.40% 8.55% 6.68%
4 7.41% 11.52% 12.49% 11.52% 7.70% 6.18%
5 11.52% 8.93% 9.22% 6.93% 5.71%
6 5.76% 8.92% 7.37% 6.23% 5.29%
7 8.93% 6.55% 5.90% 4.89%
8 4.46% 6.55% 5.90% 4.52%
9 6.56% 5.91% 4.46%
10 6.55% 5.90% 4.46%
11 3.28% 5.91% 4.46%
12 5.90% 4.46%
13 5.91% 4.46%
14 5.90% 4.46%
15 5.91% 4.46%
16 2.95% 4.46%
17 4.46%
18 4.46%
19 4.46%
20 4.46%
21 2.23%
Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Source: IRS Publication 946, Table A-1.