Ready to build an ac

Accretion / dilution analysis Fill in the bordered boxes using

To see how you're doing, check

Acquirer Target Pro

Google Motorola Forma (Year 1)

Acquirer
Current share price $750.00
Diluted shares outstanding 310,000,000
2013 Earnings per share (EPS) forecast $25.00
Acquirer shares issued in transaction

Target
Pre-deal share price $25.00
Offer price per share $40.00
% Offer Premium
Shares outstanding 315,000,000
Offer value
2013 Earnings per share (EPS) forecast $2.00

Accretion / dilution analysis

Implied standalone net income
Implied standalone pretax income

Pro forma pretax income - unadjusted

Less: Interest expense from new deal debt
Less: Incremental D&A expense
Less: Deal fees
Less: Financing fees amortization
Plus: Synergies
Pro forma pretax income - adjusted

Pro Forma Net Income

Pro Forma Shares Outstanding

Pro Forma EPS

Acquirer standalone EPS
Accretion / Dilution per share
Accretion / Dilution %

Sensitivity analysis
Accretion / dilution sensitivity at various % consideration and $ offer price per share assumptions
% stock:
$0.00 0% 50%
Offer price: $30.00
$40.00
$70.00
dy to build an accretion / dilution model?
he bordered boxes using the appropriate calculations.
how you're doing, check out the the 'Complete AccDil' tab on the included in this file.

Deal
Assumptions

Deal date: 1/1/2013

Form of consideration <--Assume cash portion financed entirely by new acquir

% Stock 50.0%
% Cash 50.0%

Tax rate: 40.00%

Deal debt:
Acquirer new borrowing $0
Term of loan 5 years
Interest rate on new debt 5.0%
Financing fees $2,000,000
Annual financing fee amortization $400,000

Synergies: $100,000,000

Asset write-ups:
Book value of target assets $20,000,000
Fair market value of target assets $25,000,000
Asset write-up $5,000,000
Useful life 10 years
Incremental D&A expense $500,000

Deal fees: $5,000,000 Advisory fees in M&A

100%
ed entirely by new acquirer debt for simplicity of this exercise.
Accretion / dilution analysis
Acquirer Target
Google Motorola

Acquirer
Current share price $750.00
Diluted shares outstanding 310,000,000
2013 Earnings per share (EPS) forecast $25.00
Acquirer shares issued in transaction 8,400,000

Target
Pre-deal share price $25.00
Offer price per share $40.00
% Offer Premium 60.0%
Shares outstanding 315,000,000
Offer value $12,600,000,000
2013 Earnings per share (EPS) forecast $2.00

Accretion / dilution analysis

Implied standalone net income $7,750,000,000 $630,000,000
Implied standalone pretax income $12,916,666,667 $1,050,000,000

Pro forma pretax income - unadjusted

Less: Interest expense from new deal debt
Less: Incremental D&A expense
Less: Deal fees
Less: Financing fees amortization
Plus: Synergies
Pro forma pretax income - adjusted

Pro Forma Net Income

Pro Forma Shares Outstanding

Pro Forma EPS

Acquirer standalone EPS
Accretion / Dilution per share
Accretion / Dilution %

Sensitivity analysis
Accretion / dilution sensitivity at various % consideration and $ offer price per share assumptions
% stock:
$0.90 0%
Offer price: $30.00
$40.00
$70.00
 Pro Deal
Forma (Year 1) Assumptions

Deal date: 1/1/2013

Form of consideration <--Assume cash portion finance

% Stock 50.0%
% Cash 50.0%

Tax rate: 40.00%

Deal debt:
Acquirer new borrowing $6,300,000,000
Term of loan 5 years
Interest rate on new debt 5.0%
Financing fees $2,000,000
Annual financing fee amortization $400,000

Synergies: $100,000,000

Asset write-ups:
$13,966,666,667 Book value of target assets $20,000,000
($315,000,000) Fair market value of target assets $25,000,000
($500,000) Asset write-up $5,000,000
($5,000,000) Useful life 10 years
($400,000) Incremental D&A expense $500,000
$100,000,000
$13,745,766,667 Deal fees: $5,000,000 Advisory fees in M&A

$8,247,460,000
318,400,000

$25.90
$25.00
$0.90
3.6%

are assumptions

50% 100%
<--Assume cash portion financed entirely by new acquirer debt for simplicity of this exercise.

Advisory fees in M&A