Calculating the equity value in an M&A context is quite similar from working out from a non M&A context We start by taking some kind of share price, times it by some kind of shares to get to our equity value The share price we're going to take is the offer price, being offered by the acquirer for the target shares We then multiply that by the number of shares outstanding and that's going to be the diluted number of shares outstanding This takes account of the dilutive effect of any potential shares, such as from share options or from convertible debt So gets us our acquisition equity value, that's what we actually need to pay for if we're the acquirer It can also be useful to work out how to get to the acquisition enterprise value And for that, you start with the acquisition equity value that we just calculated And then you add on any enterprise value bridge items, such as net debt non core assets, any debt equivalents etc Why is it useful to have your enterprise value? Well it can be useful for working out acquisition EBIT and EBITDA multiples But also useful for working out fees and it's used in a ROIC calculation (return on invested capital)