backing into purchase price by looking at balance sheet? help needed
hi team - is this possible? looking at a balance sheet of a PE backed portco (recently acquired) and trying to figure out what the purchase price was.
long-term debt is $200M
Total stockholder equity is $500M.... of that $500M, $10M is common stock and $490M is additional paid-in capital
To back into purchase price, would i just add the $200M debt + the total stockholder equity of $500M? or would it be the debt of $200M + $490M?
thanks so much. if you can provide context and explanation, that would be super helpful so i understand this conceptually as well. thanks team.
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bump! thanks
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No, you are certainly not an expert. The sponsor wouldn't have paid a premium for synergies on a platform acquisition. What they paid is entirely market- and process-dependent. Also, typically, as sponsor, you try to avoid paying for synergies, otherwise you're not gaining the benefit...even if this were for an add-on, which it wasn't.
That sounds sensible.
Sense check would be if you have rough EBITDA and if the multiple on your approx. EV makes sense.
thanks! i proposed 2 options above. which one are you saying is sensible? see original post (i showed 2 possible calculations)
just add the $200M debt + the total stockholder equity of $500M?
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