Evaluating an acquisition ex post
I have to evaluate an acquisition that occured in 2009 and see whether it created value. What is the best way to go about doing this?
I was going to take all of the FCF that were generated after the acquisition closed, discount them back to the time the acquisition closed, and then compare the total PV to the purchase price. I was also going to include a terminal value starting from now in the cash flows to deal with all future cash flows as well.
Is this fair? I haven't done anything like this before so wanted to check if the way I am approaching it is wrong.
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