Hi monkeys
Just came across an interesting accounting case study incl. NCI/minority and treatment of investment associates for EV/EqV bridge and valuation metrics
Assuming:
- Consolidated EBITDA: 130m (o/w EBITDA generated from minority shareholders having 49%)
- Associate investments income: 10m
- Minority interest: 5m
- Net income: 66.5m (already deduction of minority interest).
B/S entry:
- Associates: 100m
- equity attributable to minority shareholders:: 60m
Case study is asking: calculating relevant valuation multiple for NCI + associates using BV on B/S.
Would it be:
- Associates: 100/10=10x
- NCI: 60/5=12x?
And for the EV/EqV bridge: deduct the associate investment of 10m (form of cash/non-core?) and add-up and NCI (BV) of 60m to the bridge?
EV/EBITDA would be: EV (incl. 60m NCI, deduct 100m) / 130m
P/E : Market cap (share price x option) / 66.5m -> no deduction needed as NI has been already adjusted above
What about the 13m EBITDA , bit confused here.
Many thanks!
Fix:
For the NCI valuation - would it be:
- 60m (NCI) / 0.49% (NCI share) = Market cap of minority 122m
- 5m (NCI income) / 0.49% (NCI share) = 10
-> Multiple: 122/10m?
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