M&A - Model Tour and Forecasts
- 04:44
Reviewing each section of the model to get a sense for the different sections that need to be completed. Also, pulling revenue and earnings data from Felix as well as assumptions from the handout.
Download a file of the data from the free downloads section, or access the live industry data in Felix.
Access the live industry data for L3Harris Technologies here: https://felix.fe.training/company-analytics/?ticker=LHX&cik=0000202058
Access the live industry data for General Dynamics here: https://felix.fe.training/company-analytics/?ticker=GD&cik=0000040533
Transcript
In this video, we'll look at the Excel template provided that we'll use to build out our m and a analysis. Once we're done with that, we're gonna begin importing some of our Felix data, such as revenue and earnings forecasts. So here we have the Excel template where we're gonna import data from Felix. We're gonna build out our assumptions and of course, the model itself. Now, at the very top of the template, you will find a few rows where we can enter revenue historically, as well as revenue forecasts for both the acquirer and the target. And we can also enter earnings historically and forecasted.
Next, you will see a section where you can calculate the acquisition equity value of the target as well as its current net debt. Now once we're done with that, we'll move on to our m and a assumption section, and here we're gonna enter m and a assumptions provided in the handout, as well as some data from Felix.
Now, once we finish building out all of the assumptions, we can move on to the main section in this template, and that is our m and a analysis. This is also the largest section, and you will see that at the very top we're gonna be building our financing structure for the deal as well as the sources and uses of funds stable.
Once we're done with that, we'll move on to our last quantitative section, which is the calculation of EPS, accretion or dilution. The last section in this template provides some space for us to think about and write down some qualitative considerations in relation to the transaction.
So now we can begin, let's go back all the way to the top of the template, and let's work on entering the revenue and the earnings numbers for both companies. So I'm gonna go over to Felix and I'm gonna start with the acquirer. I'm gonna type GED, which is the ticker that's gonna take me to the company's page.
I'm gonna click on valuation to go to the valuation tab. Then I'm gonna scroll all the way down, and you will see here a table labeled earnings.
Now we're gonna copy this table by clicking on the top right icon copy. We're gonna go Back to our template, but here we have to be careful.
What I wanna do first is I wanna paste the data on an empty sheet. So I'm gonna create a new sheet, and I'm gonna paste the data over here because I only wanna copy paste the numbers, not the labels, but the numbers from this data set.
So I'm gonna take just the numbers, I'm gonna copy them, go back to our template, and I'm gonna paste them as values.
Perfect. So that's the data we need for our acquirer. Now I'm gonna go ahead and repeat the process for the target.
Let's go back to Felix. Go to our ticker field type LHX, which is the ticker for our target company.
And once again, we're gonna scroll down, copy the earnings table, go back to our Excel file first, paste it on an empty sheet, take only the values from the table, copy them, go back to the template and paste them as values on our assumptions table.
Great. Now we have our historical revenue and earnings, our LTM revenue and earnings, as well as our forecasted revenue of and earnings for both the acquire and the target.