To find the acquire and target valuation first, we need to calculate the diluted shares of the targets.

To do this, we need to identify all equity linked instruments such as options warrants Etc.

Then we use the treasury stock method to calculate the net new shares created.

The formula for that is offer price minus strike price.

divided by the offer price All multiplied by the number of Ft. Linked instruments For the streets in stock units or rsus. There is no strike price, but the due diligence needs to ascertain the treatment of the rsu's if conditions for vesting exist. For instance a certain share price or certain Total sharehold return level might have to be reached if vesting is going to happen.

The other thing we have to do is set the assumptions. We need acquirer and Target share prices then a takeover control premium.

A foreign exchange or f x rates and then transaction financing and fees.

Regarding the transaction financing. We've got some choices to make here a bridge loan often won't be included in the model as it's refinance quickly post closing the excess cash can only be utilized from the acquire is cache.

For debt, we need to decide the mix of amortizing or bullet repayments and how many tranches to use? The equity we could have a secondary issue IE giving shares to the public market and then using the resulting cash inflow to pay for the targets.

Or you could just give shares directly to the Target shareholders.

We can use the switch to flick between these assumptions and lastly any Equity linked instruments that you might want to include need to be thought about.

Let's see all of this in the model.

We start on the assumptions Tab and let's start with the target, Monsanto.

We have their share price.

And the share premium of 42.8% so we can calculate the offer price.

Next we need to know the number of diluted shares. We'll use the treasury stock method on the target local FX tab.

And if we go to row 137 we can see this is already been calculated for us.

There is our formula this relies on the offer price in row 13 of the assumptions tab, so that's why we went and did that first they have dilution from options.

Plus some restricted stock.

giving the total shares outstanding figure of 444.5 if we go back to the assumptions.

We can link that up.

And calculate the dialysis activity the off-price.

56,910.6 we also need the number of diluted shares for the quieter. But if we go to the acquire tab We see that they have no dilution at all. So the diluted shares outstanding is unchanged from the basic figure further up. Let's link that to the assumptions tab.

And we can calculate our diluted equity.

done