Okay guys,
Trying to convert this value into a comparable all cash offer. Needing help with what to discount and how...
Approx Value of Company: 220M; smaller private home builder
Founders and majority shareholders are placing a large premium on liquidating positions in year and job security for children.
Offer from Competitor; large public home builder
380M
30% cash
50% stock that can be unlocked at 20% per year for 5 years
10% 5 year pik at 6%
10% released at 2% per year if ebitda targets are met annually.
This case study is for a competition for ACG and additional details are not provided and cannot be sought.
Main Questions:
How do convert this to an all cash purchase price?
How do I discount the non-cash portions of this offer into "cash offer"?
Thanks for the help in advance.
present value / all in cash cost?
Sorry I'm pretty green on discounting non-traditional cash flows. Are you saying present value/ divided by all-in cash cost or are you asking which one do I need?
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