Asset vs. Share Deal LBO
Hi all, If i am supposed to build an LBO model structured as an asset deal - is this just the same as a normal LBO? Or what do i have to change?
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In Europe you revalue the assets to fair market value and therefore depreciation will increase post transaction.
Thank you. But in terms of the model all is similar to a share deal model; if for example you ignore the asset fair value valuation?
Big differences on your tax schedules (e.g. you can amortize goodwill for tax purposes in asset deal)
Thank you. Imagine a Modelling Test is structured as Asset Deal, what do you I have to build compared to a normal LBO?
D&A increases, so you pay less taxes. That's it.
In a share deal, the accounting D&A increases but not the tax D&A, so you don't actually get the extra tax shield. In an asset deal you do.
Sorry, but why is D/A increasing and how should i model this?
No DTL is created from write-ups, Amortize Goodwill, NOLs wiped out (usually don’t use for good LBO candidates anyway), that’s most of it.
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