You're evaluating the acquisition of a competitor in your industry. The current market capitalization of the target
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You're evaluating the acquisition of a competitor in your industry. The current market capitalization of the target is 125 M with a 2.5$ stock price. Following the acquisition you expect to generate incremental revenues of 10 M per year at a post acquisition COGS of 60%. You also expect the acquisition to generate costs savings of 2.5 M per year. The offered price per share is 3.75 $ and the cost of capital is 12%. Determine whether you are offering a reasonable price.
Related Book For
Equity Asset Valuation
ISBN: 978-0470571439
2nd Edition
Authors: Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe, Abby Cohen
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