Minority interest question
Company A: 0 EBITDA / 0 Net debt
Company B: 10 EBITDA / 20 Net debt
Company C: 5 EBITDA / 15 Net debt
A acquires 75% of B (10x EBITDA); B owns 100% of C. How would you calculate this?
My thoughts/ questions:
- it depends on if C is already consolidated reported in B?
- assuming not, combined EBITDA A+B = 15 / combined Net debt A+B= 35.
Buying at 10x combined EBITDA = EV = 150
Less: Net debt -35
Equity value = 115
A has to report a MI (due to the 25% not owned in B); 25% of ?
Please help!
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PSUH
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