but I'm not too bright, so hoping somebody can help me understand this.
Let's say Company B has net debt of $50. Company A decides to purchase 75% of Company B for $120 (new equity). This gives us implied equity value of $160. What is the implied enterprise value? $210 (160 + 50), or $90 (160 + 50 - 120), and if the latter, why?
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210
if the equity was used to recapitalise the company (i.e. to pay down debt) then i will say the latter... if it was for acquisitions then it would be the former...
90 pre acquisition. 210 post.
210.... how do you get 90 pre-acquisition ? What is the logic there?
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