Bridge EV to EqV

think of it as:

Equity Value is what buyers will be happy to receive. Let's say 100m is what they'd be happy with.

Then, you have to add everything else on top. 

Do they have unfunded pension liabilities (e.g. have to pay more into pensions?) Do they have debt? We'll have to pay.

Accounting-wise, do they have minority interest? Accounting rules say that if you own a majority of a company, you show all of their P&L together with yours but then in the end you deduct "minority interest" which is what's not really yours.

Do they have capex commitments (legally must pay something in next few years)? That has to be added because we need the money. (done sometimes in infrastructure, not corporates) 

Finally, we have to pay all of this additional stuff but they already have some cash, which can be used for these things. So we deduct cash or anything that can be converted to cash quickly (some investments)

Companies across industries differ but in general you end up with something like:

+ Equity Value
+ Debt (all sorts)
+ Preferred stock (have to also pay them before ordinary equity, they are higher in capital structure)
+ Unfunded pension liabilities
+ Minority Interest (have to pay them off)
- Cash
= Enterprise Value

And vice versa

If we say "we'll pay 200m for everything", sellers can think of covering everyone else before them (debt mostly) and whatever is left for them is the Equity Value


Actual calc can be like:
+ 100m Equity Value
+ 100m Debt
+ 5m preferred stock
+ 5m unfunded pension liabilities
+ 10m minority interest
-  20m Cash
= 200m Enterprise Value