How to Measure IRR for Acquirer in M&A Setting?
If Company A (Acquirer) is acquiring Company B (Target) with a mix of cash from the balance sheet and new debt, and assume Company B is spun-off in 5 years, how would one measure IRR for Company A for this acquisition?
Would the cash from balance sheet be considered the "investor equity" that is used as the initial outflow in the IRR calculation? Or would I include the new debt as a part of the "initial outflow" in the calculation? (also assuming no debt repayment until exit)
Would super appreciate any help here!! Thanks~
Qui nemo nostrum sapiente tempore vel est unde. Voluptatem voluptate iste ea in odit labore amet. Fugit rerum neque sunt praesentium omnis molestiae vero. Saepe ea ut nisi ducimus impedit. Unde dolor soluta ea quo.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...