Buyer is acquiring 80% of Target and wants to understand what the proforma income statement might look
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Question:
Buyer is acquiring 80% of Target and wants to understand what the proforma income statement might look like for the following 12 months.
The deal is valued at 10,320m and is all equity financed.
SG&A synergies are expected to be 34m per annum by reducing staff costs at the target.
Deal goodwill is expected to be 680m. The tax rate is 30%. Using the information given below for each business standalone (no adjustments have yet been made as a result of the deal), what is consolidated net income attributable to non controlling shareholders?
Buyer | Target | |
Sales | 11,211.2 | 3,439.8 |
COGS | 3,923.9 | 859.8 |
Gross profit | 7,287.3 | 2,580.0 |
SG&A | 4,484.5 | 1,547.9 |
Operating profit | 2,802.8 | 1,032.1 |
Interest income | 10.2 | 2.5 |
Interest expense | 382.2 | 152.9 |
Profit before tax | 2,430.8 | 881.7 |
Tax expense | 510.5 | 158.4 |
Net income | 1,920.3 | 723.3 |
Attributable to NCI | 0.0 | 0.0 |
Attributable to parent shareholders | 1,920.3 | 723.3 |
Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
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