Acquisitions: Do companies pay Equity Value, but total cost/value of transaction is Enterprise Value?
I was wondering if a company, when acquiring another, has to pay only for the Equity Value (in order to become controlling shareholder = buy shares), but the total cost of the transaction is measured by Equity Value + Net Debt, as the acquirer becomes also the new debtor, that is, the debt act as a "cost", although it does not happen as a payment itself.
Hey wellingtonc., I'm here because nobody responded to this thread after a few days...maybe one of these resources will help you:
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Hope that helps.
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