DCF Debt Sale 
Francine Way
JULY 12, 2017
As I mentioned in my last post, Discounted Cash Flow (DCF) is a valuation method that uses free cash flow projections, a discount rate, and a growth rate to find the present value estimate of a potential investment. The major steps of DCF are: Identify extraordinary, unusual, non-recurring items from the target’s 10-Ks and 10-Qs.
Francine Way
JULY 17, 2017
Building a historical 3-statement model and a debt-interest schedule. Building the go-forward debt-interest schedule. Implied Equity Purchase Price = Transaction Value - Debt + Cash. For this table, recall that LBO transactions are heavily financed with debt (it can go up to 90% of the capital structure for some deals).
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Lake Country Advisors
AUGUST 8, 2024
Accurate and appropriate valuation is one of the pillars of maximizing the profits from a business sale. It’s integral to ensuring that the sale benefits all stakeholders and should be one of your priorities before advertising it to potential buyers. million Year 2: $2 million / (1 + 0.10)^2 = $1.65 million + $1.65 million + $2.25
Mergers and Inquisitions
MAY 3, 2023
It can be useful for certain companies, such as power and utility firms and midstream (pipeline) operators in oil & gas … …but it’s also much harder to set up and use than a standard DCF. The basic set of steps looks like this: Step 1: Forecast Revenue and Expenses This is the same as in any other 3-statement model or DCF.
Francine Way
JULY 20, 2017
Thus far, we have covered four popular valuation methods in M&A (DCF, Comparable Company, Precedent Transaction, and LBO) and one less known one that is making its way out of the academic realm into the business world (Dividend Discount Method, DDM). Each asset class is revalued based on its sale in a 60-90 day sales process.
Mergers and Inquisitions
MARCH 13, 2024
Debt financing is much more common, and the GE firm is often the first institutional investor. Many of these firms use debt to fund deals, and they complete bolt-on acquisitions for portfolio companies. They do not use debt since they only make minority-stake investments. The targeted IRR might be in the 30 – 40% range.
Francine Way
JULY 19, 2017
Thus far, we have discussed five valuation methods: DCF, Comparable Company, Precedent Transaction, LBO, and Dividend Discount Model (DDM). For the purpose of our post, the output variables should be the per-share equity value returned from our DCF, Comparable Company, etc. Well, in the real world, there is no certainties in business.
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