Basic information (you do not need to use every piece of information listed here)

BuyerCo is offering $58.73 for each share of ValueCo common stock. BuyerCos current share price is $70.00, and ValueCos current share price of $43.50. Fully diluted shares outstanding of VaueCo is approximately 80 million. Meanwhile, ValueCo also has net debt of $1,250 million.

Sources of Funds for BuyerCo:

• $2,200 million of term loan B
• $1,500 million of senior notes
• $300 million of cash on hand (including $50 million of existing

BuyerCo cash)

Uses of Funds for BuyerCo:

• Purchase of ValueCos equity for $4,700 million
• Repayment of ValueCos existing $1,000 million term loan and

$500 million senior notes

• Payment of total fees and expenses of $150 million, consisting of: i) M&A advisory and other transaction fees of $40 million, ii) debt financing fees of $90 million, and iii) tender/call premiums of $20 million

1. ValueCos approximate equity value is $3,500 million and existing goodwill is $1,000 million. How much is the net identifiable asset for ValueCo?

2. How much goodwill will be created after the transaction? Assuming 15% writeup for the tangible assets and a 10% write-up for the intangible assets. (Please show the procedure when you work out the final solution).