University of California San Diego United States DoorDash Inc Precedent Transactions Paper

Description

The company I initially chose to analyze was DoorDash Inc, please use DoorDash Inc’s acquisition case to do the assignment.The spreadsheet must be completed with 3 or more Precedent Transactions and Provide a written analysis.These files are Precedent Transactions_Template and an example of written analysis.Investment Banking
Valuation, Leveraged Buyouts,
and Mergers & Acquisitions
Precedent Transactions Analysis – Template
JOSHUA ROSENBAUM
JOSHUA PEARL
($ in millions)
List of Comparable Acquisitions
Date
Announced
Acquirer
Target
Transaction
Type
Target Business Description
Equity
Value
Enterprise
Value
LTM
Sales
1/0/1900
Acquirer
Target
NA
[to come]



1/0/1900
Acquirer
Target
NA
[to come]



1/0/1900
Acquirer
Target
NA
[to come]



1/0/1900
Acquirer
Target
NA
[to come]



1/0/1900
Acquirer
Target
NA
[to come]



1/0/1900
Acquirer
Target
NA
[to come]



1/0/1900
Acquirer
Target
NA
[to come]



1/0/1900
Acquirer
Target
NA
[to come]



1/0/1900
Acquirer
Target
NA
[to come]



1/0/1900
Acquirer
Target
NA
[to come]



ValueCo Corporation
Precedent Transactions Analysis
($ in millions)
Enterprise Value /
Date
Announced
Acquirer
Target
Transaction
Type
Purchase
Consideration
Equity
Value
LTM
Sales
LTM
EBITDA
LTM
EBIT
LTM
EBITDA
Margin
Equity Value /
Enterprise
Value
LTM
Net Income
Premiums Paid
Days Prior to Unaffected
1
7
30
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
1/0/1900
Acquirer
Target
NA
NA


NA
NA
NA
NA
NA
NA
NA
NA
Mean
Median
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA NA
NA NA
NA
NA
NA
NA
High
Low
0.0x
0.0x
0.0x
0.0x
0.0x
0.0x
0%
0%
0.0x
0.0x
0%
0%
0%
0%
0%
0%
Source: Company filings
Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Acquisition of Target by Acquirer
Input Page
($ in millions, except per share data)
General Information
Reported Income Statement
Target
Ticker
Fiscal Year Ending
Marginal Tax Rate
Target
TRGT
Jan-00

Acquirer
Ticker
Fiscal Year Ending
Acquirer
ACQR
Jan-00
Date Announced
Date Effective
Transaction Type
Purchase Consideration
1/0/1900
1/0/1900
NA
NA
Calculation of Equity and Enterprise Value
Offer Price per Share
Cash Offer Price per Share
Stock Offer Price per Share
Exchange Ratio
Acquirer Share Price
Offer Price per Share

Fully Diluted Shares Outstanding
Implied Equity Value
Target Description
Prior
Stub
1/0/1900
FYE
1/0/1900
Current
Stub
1/0/1900
[to come]
LTM
1/0/1900
Sales
COGS
Gross Profit
SG&A
Other Expense / (Income)
EBIT
Interest Expense
Pre-tax Income
Income Taxes
Noncontrolling Interest
Preferred Dividends
Net Income
Effective Tax Rate
NA
NA
NA
NA
Weighted Avg. Diluted Shares
Diluted EPS
NA
NA
NA
NA

Adjusted Income Statement

Reported Gross Profit
Non-recurring Items in COGS
Adjusted Gross Profit
% margin
NA
NA
NA
NA
Reported EBIT
Non-recurring Items in COGS
Other Non-recurring Items
Adjusted EBIT
% margin
NA
NA
NA
NA
Depreciation & Amortization
Adjusted EBITDA
% margin
NA
NA
NA
NA
Reported Net Income
Non-recurring Items in COGS
Other Non-recurring Items
Non-operating Non-rec. Items
Tax Adjustment
Adjusted Net Income
% margin
NA
NA
NA
NA
Adjusted Diluted EPS




NA
NA
NA
NA
NA
NA
NA
NA

[to come]
Comments
[to come]
Implied Enterprise Value
Plus: Total Debt
Plus: Preferred Stock
Plus: Noncontrolling Interest
Less: Cash and Cash Equivalents
Implied Enterprise Value
Acquirer Description
Calculation of Fully Diluted Shares Outstanding
Basic Shares Outstanding
Plus: Shares from In-the-Money Options
Less: Shares Repurchased from Option Proceeds
Net New Shares from Options
Plus: Shares from Convertible Securities
Fully Diluted Shares Outstanding

Options/Warrants
LTM Transaction Multiples
EV/Sales
Metric
EV/EBITDA
Metric
EV/EBIT
Metric
P/E
Metric
NA
NA
NA
NA

Premiums Paid
Transaction Announcement
1 Day Prior
Unaffected Share Price

Premium
NA
1 Day Prior
7 Days Prior
30 Days Prior

NA
NA
NA
Source Documents
Target 10-K
Target 10-Q
Target 8-K
Target DEFM14A
Acquirer 424B
Acquirer 8-K
Period
1/0/1900
1/0/1900
Date Filed
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
1/0/1900
Tranche
Batch 1
Batch 2
Batch 3
Batch 4
Batch 5
Total
Number of
Shares

Depreciation & Amortization
% sales
Capital Expenditures
% sales
Notes
(1) [to come]
(2) [to come]
(3) [to come]
(4) [to come]
(5) [to come]
In-the-Money
Shares

Conversion
Price

Conversion
Ratio

Proceeds

Convertible Securities
Amount
Cash Flow Statement Data
Exercise
Price

Issue 1
Issue 2
Issue 3
Issue 4
Issue 5
Total

New
Shares

Copyright © 2009 by Joshua Rosenbaum and Joshua Pearl. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
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The company that I had done my comparable financials on was Merck and Co., one of the world’s leaders
in biopharmaceuticals and drug discovery. In their recent proxy statement, Merck declared that it would
invest more of its time and resources into cancer research and drug discovery combating the disease.
The first two transactions are by Merck itself; they are Merck’s two most recent transactions with public
companies that specialized in products involving cancer. The next three transactions are acquisitions
headed by Eli Lilly and Roche, two of Merck’s close competitors and their respective recent acquisitions
of cancer-based companies. It is interesting to see how the Merck transactions, although smaller in scale,
follow similar trends in their data. I want to point out that all the acquired companies were “research
first” companies; their annual reports and proxy statements specifically state that they are looking to be
acquired based on their scientific accomplishments, and are making minimal profits; one company even
listed a gross profit of 0. It is interesting that although the EBITDA multiples for all the companies are
negative (they are all generating more debt that profits), the companies that had acquired them had
paid a heavy premium. A negative EBTIDA and EBITDA multiple makes sense, the gross profit and EBIT
were mostly negative to begin with.
I believe that the acquisition of my first transaction might have been leaked the day before, or Merck
must have wanted the deal to get done quickly, as at the time of its acquisition, its stock rose more than
300% (as it sold for a 300%+ premium). The stock was very consistent from its initial value to its value till
the day of the transaction, where it shot up.
My third and fourth transactions that featured Loxo Oncology and Spark Therapeutics both had not only
been losing a significant amount of money resulting in EBITDA multiples of -90x, but also had notes in
their 10k statements stating that they are not focused on generating revenue and are looking to be
acquired. When they were acquired, their sold for very handsome premiums. Since their research is
based on cancer research, they might have valued their assets / goodwill as more than their loses, as
they were sold for a good profit.
All the acquired companies had negative EBITDA values as well as negative net incomes, yet sold for high
premiums. Since this is the pharmaceutical industry where intangible assets such as formulas to new
drugs and new treatments cannot be properly assigned a number value, I believe that Merck, a
pharmaceutical company itself as well as owning several smaller companies, has a true value greater
than its Enterprise value based on its numbers. Right now, Merck’s market cap is at 198B, but if you look
closely at its balance sheet, it accounts a large amount for its goodwill/intangible assets. Depending on
the company valuing those assets, as they are likely drug patent related, the value could go much higher,
as exhibited by the first transaction.
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