Top Notch is acquiring Valmet in a non-taxable stock swap merger. In this deal Top Notch is
Question:
Top Notch is acquiring Valmet in a non-taxable stock swap merger. In this deal Top
Notch is paying with stock worth $80 million. Valmet's balance sheet immediately prior to the acquisition is indicated below. Assume that Valmet's fair value of PP&E is 15% higher than its current book value, and the fair value of its intangible assets is 10% higher due to the unrecognized value of brand names and patents; and that the fair market value of all other assets and liabilities are as reported
Valmet's Balance Sheet ($ Millions) | |
Cash and Cash Eq. | 5 |
Accounts Receivables | 20 |
Inventory | 5 |
Other Current Assets | 0 |
Total Current Assets | 30 |
Net Plant Property and Equipment | 38 |
Intangibles Assets | 45 |
Other Long-Term Assets | 7 |
Total Assets | 120 |
Accounts Payable | 23 |
Accrued Expenses | 0 |
Total Debt | 22 |
Other Liabilities | 30 |
Total liabilities | 75 |
Common equity | 45 |
Liabilities + Equity | 120 |
What is the amount of deferred tax liabilities (DTL) associated with this transaction? Assume a tax rate of 35% when calculating DTL. Give your answer in Million and up to 2 places of decimal and without the $ sign