Comparing M&A offers with the same EV offer
If for an M&A process, 3 different companies make the same offer e.g. EV of $Xm, how do you compare the offers? How can the offers differentiate?
One thing may be the financing, e.g. was offer is all-cash, where another is 50-50 (cash and equity). Heard some people say the make of working capital is another reason - what does this mean?
Would appreciate other thoughts as well.
Thank you!
1) The EV to Equity value bridge - What do they consider debt like items, pensions...
2) Payment conditions: All upfront? Cash & Stock? Earn outs?
3) Objectives in the company: Are they willing to invest a lot? Are they going to save jobs? Is the mngmt team continuing?
4) Are they our competitors? Do we want sponsors or industrials to manage this company?
5) Prior relationships: Do we prefer company X to acquire the company or company B?
These are some of the things that I have seen as drivers taken into account in similar decisions
Thank you very much. Could you explain the EV to Equity value if you don't mind? Thank you.
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