Overview

This all in one advanced valuation financial model analyzes a merger. The model integrates both DCF and LBO into the analysis.

This is an advanced model for experienced finance professionals who are looking for an extensive analysis of a merger. Each part of the deal will be first analyzed individually for a granular and thorough analysis.

The template starts with an acquirer standalone model which contains the following:

  • Model of Acquirer Income Statement - Breakdown of Historicals, Non-Recurring Items, EBITDA Reconciliation
  • Model of Acquirer Balance Sheet - Breakdown of Historicals, Capitalization and Leverage Ratios
  • Historical Working Capital Ratios
  • Model of Cash Flow Statement
  • Model of Working Capital
  • Summary of Acquirer Financials
  • Summary Historical and Projected Financial Performance and the Free Cash Flow Calculation
  • Acquirer Capitalization Summary
  • Discounted Cash Flow Analysis of the Acquirer

Following that is the target standalone model which contains the following:

  • Model of Target Income Statement - Breakdown of Historicals, Non-Recurring Items, EBITDA Reconciliation
  • Model of Target Balance Sheet - Breakdown of Historicals, Capitalization and Leverage Ratios
  • Historical Working Capital Ratios
  • Model of Cash Flow Statement
  • Model of Working Capital
  • Summary of Target Financials
  • Summary Historical and Projected Financial Performance of the Target company and the Free Cash Flow Calculation
  • Target Capitalization Summary
  • Discounted Cash Flow Analysis of the Target

After completing the standalone models the next sections contain projections for both the acquirer and target companies. A Leveraged Buyout Model (LBO) with an IRR sensitivity analysis then follows.

Lastly, the template combines data from all the previous models to create a pro forma combined merger model.  Accretion/Dilution sensitivity analysis and synergy sensitivity are then performed to further support the analysis.

This is a very extensive and thorough analysis and should be used by senior finance professionals who have experience with M&A models.

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