Valuation Case DueALP (DP) Inc, a European diversified pharmaceutical company is looking to acquire Thunderbird Pharma,...

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Valuation Case DueALP (DP) Inc, a European diversified pharmaceutical company is looking to acquire Thunderbird Pharma, Inc. (TP), a privately held pharma company located in Ireland. The main business of TP is pharmaceuticals that treat relatively rare diseases, thus too small for large international pharmaceutical companies to invest in. The following data is available for TP: Forecasted (F) and Actual (A) Statement of Income 2022 (A) 2023 (A) 2024 (F) Sales $60.6 $58.2 $105.1 Cost of Sales 49.5 45.2 74.3 Gross Profit $ 11.1 $13.0 $ 30.8 SG&A 5.6 8.5 16.0 EBITDA 5.5 4.5 14.8 D&A 2.1 2.0 4.0 EBT $ 3.4 $ 2.5 $10.8 Again, the main business of TP is pharmaceuticals that treat relatively rare diseases, i.e. diseases that are not very common. Required: Calculate the value of TP using the following methods (a, b, and c): a. Comparable multiples (p/s and p/e)* as a valuation method. The most important aspect of (a) is the selection of inputs and the associated documentation, discussion, and motivation for why certain companies and numbers were selected. b. Acquisition Premium. Again, defend your input(s)! c. Discounted Cash Flow Analysis, which must include the Terminal Value (TV). As in (a), document your selections. The forecast must be for 5 years in total. Then, assume an appropriate terminal value. Document your assumptions and defend your position. d. Compare the computed values and comment in detail on the firm's performance and valuation as related to your selection of comparables. Also use the PEG Ratio to check your valuation range, in addition to the previously calculated valuation metrics. Decide on a value or narrow range of values. e. You must discuss your selection of inputs that you use in the models. This is a very important part of the assignment. Also, discuss how you forecasted the income statement. Again, be sure to state any assumptions you make. Also, discuss and support why you picked certain numbers and companies. As stated earlier, this is an important aspect of this problem. If needed, use a discount rate of 20 percent. If needed, the tax rate = 25%. Discovering treatments is a risky business. Valuation Case DueALP (DP) Inc, a European diversified pharmaceutical company is looking to acquire Thunderbird Pharma, Inc. (TP), a privately held pharma company located in Ireland. The main business of TP is pharmaceuticals that treat relatively rare diseases, thus too small for large international pharmaceutical companies to invest in. The following data is available for TP: Forecasted (F) and Actual (A) Statement of Income 2022 (A) 2023 (A) 2024 (F) Sales $60.6 $58.2 $105.1 Cost of Sales 49.5 45.2 74.3 Gross Profit $ 11.1 $13.0 $ 30.8 SG&A 5.6 8.5 16.0 EBITDA 5.5 4.5 14.8 D&A 2.1 2.0 4.0 EBT $ 3.4 $ 2.5 $10.8 Again, the main business of TP is pharmaceuticals that treat relatively rare diseases, i.e. diseases that are not very common. Required: Calculate the value of TP using the following methods (a, b, and c): a. Comparable multiples (p/s and p/e)* as a valuation method. The most important aspect of (a) is the selection of inputs and the associated documentation, discussion, and motivation for why certain companies and numbers were selected. b. Acquisition Premium. Again, defend your input(s)! c. Discounted Cash Flow Analysis, which must include the Terminal Value (TV). As in (a), document your selections. The forecast must be for 5 years in total. Then, assume an appropriate terminal value. Document your assumptions and defend your position. d. Compare the computed values and comment in detail on the firm's performance and valuation as related to your selection of comparables. Also use the PEG Ratio to check your valuation range, in addition to the previously calculated valuation metrics. Decide on a value or narrow range of values. e. You must discuss your selection of inputs that you use in the models. This is a very important part of the assignment. Also, discuss how you forecasted the income statement. Again, be sure to state any assumptions you make. Also, discuss and support why you picked certain numbers and companies. As stated earlier, this is an important aspect of this problem. If needed, use a discount rate of 20 percent. If needed, the tax rate = 25%. Discovering treatments is a risky business.