This section of the model involves calculating the acquisition equity value of the target And then going up and over the EV equity bridge to calculate your total acquisition enterprise value So we start off by calculating the offer price or the acquisition price per share We take the 4 (which is the current share price) and multiply that by one plus the premium. At the moment that's 25% The number of shares outstanding are 31, however we've got some options So we need to calculate the diluted shares outstanding by adding the 31 to any shares created due to options We've got that to the right hand side We've got options outstanding of 5 and strike price of 3, let's compare that to the offer price of 5 So these options are in the money So we calculate the dilution as the number of options outstanding, times by the maximum of the offer price Minus the strike price, all divided by the offer price again So I want the max of that and zero Which get's me dilution of 2 So my diluted shares outstanding is going to be the 31 shares that we had, plus the two new shares Ok, so that's diluted shares outstanding The market cap of each of our companies is its current share price times by its current diluted shares outstanding Exactly the same for the target But now we want to update that for the target, to calculate the acquisition equity value Which is going to be the diluted shares outstanding, but this time multiplied by the acquisition price per share So the acquisition equity value is 165 That enables us to now go over the EV equity bridge, we start by taking the equity value, we then add on net debt We've got a debt equivalent here, being pension deficit Getting us to total acquisition EV of 225 There's also working capital adjustment, but we see that later on in the model when looking at sources and uses of funds