Interesting LBO Question for Write up Intangible/ DTL

Hello Monkeys!!

When calculating the Excess Purchase price as basis for calculating the write up of intangibles in an LBO

  1. My calculation: Purchase equity - equity on BS + existing GW on BS = excess purchase price. Then, i calculate 15% times this result (write up of intangibles) ; and tax rate times the result (DTL) . I then substract the write up and add the Dtl to the excess purchase price to arrive at the new GW. is this correct?

I have seen people basing the Write up of intangibles ONLY on purchase equity - equity on BS, resulting in smaller Write up. What is the correct way??

  1. How much % of this excess can be allocated to intangibles? ive seen 15-30% (Europe)

  2. is something allocated to PPE as well?

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