Ready to build an ac
Accretion / dilution analysis Fill in the bordered boxes using
To see how you're doing, check
Acquirer Target Pro
Google Motorola Forma (Year 1)
Acquirer
Current share price $750.00
Diluted shares outstanding 310,000,000
2013 Earnings per share (EPS) forecast $25.00
Acquirer shares issued in transaction
Target
Pre-deal share price $25.00
Offer price per share $40.00
% Offer Premium
Shares outstanding 315,000,000
Offer value
2013 Earnings per share (EPS) forecast $2.00
Accretion / dilution analysis
Implied standalone net income
Implied standalone pretax income
Pro forma pretax income - unadjusted
Less: Interest expense from new deal debt
Less: Incremental D&A expense
Less: Deal fees
Less: Financing fees amortization
Plus: Synergies
Pro forma pretax income - adjusted
Pro Forma Net Income
Pro Forma Shares Outstanding
Pro Forma EPS
Acquirer standalone EPS
Accretion / Dilution per share
Accretion / Dilution %
Sensitivity analysis
Accretion / dilution sensitivity at various % consideration and $ offer price per share assumptions
% stock:
$0.00 0% 50%
Offer price: $30.00
$40.00
$70.00
dy to build an accretion / dilution model?
he bordered boxes using the appropriate calculations.
how you're doing, check out the the 'Complete AccDil' tab on the included in this file.
Deal
Assumptions
Deal date: 1/1/2013
Form of consideration <--Assume cash portion financed entirely by new acquir
% Stock 50.0%
% Cash 50.0%
Tax rate: 40.00%
Deal debt:
Acquirer new borrowing $0
Term of loan 5 years
Interest rate on new debt 5.0%
Financing fees $2,000,000
Annual financing fee amortization $400,000
Synergies: $100,000,000
Asset write-ups:
Book value of target assets $20,000,000
Fair market value of target assets $25,000,000
Asset write-up $5,000,000
Useful life 10 years
Incremental D&A expense $500,000
Deal fees: $5,000,000 Advisory fees in M&A
100%
ed entirely by new acquirer debt for simplicity of this exercise.
Accretion / dilution analysis
Acquirer Target
Google Motorola
Acquirer
Current share price $750.00
Diluted shares outstanding 310,000,000
2013 Earnings per share (EPS) forecast $25.00
Acquirer shares issued in transaction 8,400,000
Target
Pre-deal share price $25.00
Offer price per share $40.00
% Offer Premium 60.0%
Shares outstanding 315,000,000
Offer value $12,600,000,000
2013 Earnings per share (EPS) forecast $2.00
Accretion / dilution analysis
Implied standalone net income $7,750,000,000 $630,000,000
Implied standalone pretax income $12,916,666,667 $1,050,000,000
Pro forma pretax income - unadjusted
Less: Interest expense from new deal debt
Less: Incremental D&A expense
Less: Deal fees
Less: Financing fees amortization
Plus: Synergies
Pro forma pretax income - adjusted
Pro Forma Net Income
Pro Forma Shares Outstanding
Pro Forma EPS
Acquirer standalone EPS
Accretion / Dilution per share
Accretion / Dilution %
Sensitivity analysis
Accretion / dilution sensitivity at various % consideration and $ offer price per share assumptions
% stock:
$0.90 0%
Offer price: $30.00
$40.00
$70.00
Pro Deal
Forma (Year 1) Assumptions
Deal date: 1/1/2013
Form of consideration <--Assume cash portion finance
% Stock 50.0%
% Cash 50.0%
Tax rate: 40.00%
Deal debt:
Acquirer new borrowing $6,300,000,000
Term of loan 5 years
Interest rate on new debt 5.0%
Financing fees $2,000,000
Annual financing fee amortization $400,000
Synergies: $100,000,000
Asset write-ups:
$13,966,666,667 Book value of target assets $20,000,000
($315,000,000) Fair market value of target assets $25,000,000
($500,000) Asset write-up $5,000,000
($5,000,000) Useful life 10 years
($400,000) Incremental D&A expense $500,000
$100,000,000
$13,745,766,667 Deal fees: $5,000,000 Advisory fees in M&A
$8,247,460,000
318,400,000
$25.90
$25.00
$0.90
3.6%
are assumptions
50% 100%
<--Assume cash portion financed entirely by new acquirer debt for simplicity of this exercise.
Advisory fees in M&A
