2

M&A cases - Enterprise vs Equity value

Hi - just a clarification about enterprise/equity values and how they apply to M&A cases. When the case is about purchasing the entire company, only the enterprise value should be used (calculated through DCF) but when the case is about buying individual shares as an investment, then equity value is what's relevant (calculated through market cap)?

Hi - just a clarification about enterprise/equity values and how they apply to M&A cases. When the case is about purchasing the entire company, only the enterprise value should be used (calculated through DCF) but when the case is about buying individual shares as an investment, then equity value is what's relevant (calculated through market cap)?

2 Antworten

  • Upvotes
  • Datum aufsteigend
  • Datum absteigend
Beste Antwort

EV is used to value a company according to a standard that allows you to compare it to other transactions and companies based on fundementals of the business. If you are looking to "buy" a company, that would be equity value.

EV is used to value a company according to a standard that allows you to compare it to other transactions and companies based on fundementals of the business. If you are looking to "buy" a company, that would be equity value.

Coaching mit Vlad vereinbaren

97% Empfehlungsrate

388 Meetings

7.309 Q&A Upvotes

299 USD / Coaching

Hi,

Are you talking about consulting interviews or PE interviews? In consulting interviews debt and cash are not considered and thus you are calculating just the "Value" of the company that is a very simplified version of an equity value

Best

Hi,

Are you talking about consulting interviews or PE interviews? In consulting interviews debt and cash are not considered and thus you are calculating just the "Value" of the company that is a very simplified version of an equity value

Best

Verwandte BootCamp-Artikel

Competitive Response

In a competitive response case study, your job is either to analyze what your client should do in response to a move performed by a major competitor or to anticipate what competitors will do in response to a move performed by the client

Opportunity Costs

Opportunity costs are an economic concept to quantify benefits of (discarded) alternatives. They measure the lost benefits that occur if you choose the best alternative instead of the second best one.

Quiz

Mergers and Acquisitions

Mergers & Acquisitions are often the answer to broader problems introduced in your Case interviews. Analyze feasibility, assets, target and industry to crack the Merger & Acquisition case

Cost-Benefit Analysis

Investments or single business cases need to be evaluated based on a certain set of criteria. Since financial performance is the key criterion in most cases you need to have an idea about future financial impacts. A key tool to asses this impact is the cost-benefit analysis which is used to determine the net effect of potential revenues and costs.

1 Q&A

Verwandte Cases

General Holding

40,1 Tsd. mal gelöst
General Holding Der Klient ist eine französische Holding, welche einen jährlichen Umsatz von €1 Milliarde hat. Sie halten fast alle Arten von Unternehmen, die meisten in der „Low tech Herstellung“, darunter unter anderem auch „Öl & Gas“ und „Automobil“ Firmenteile. Es gibt keinen bestimmten Bereich auf den sie ihre Investments fokussieren; sie kaufen eher die besten Unternehmen im Markt, welche nicht komplett unverwandt mit ihrem bestehenden Business sind. Sie denken nun darüber nach einen Autoteilehändler, OTOpart, zu akquirieren und möchten unsere Meinung haben, ob es eine gute Idee ist.
4.3 5 1356
| Bewertung: (4.3 / 5.0) |

Der Klient ist eine französische Holding, welche einen jährlichen Umsatz von €1 Milliarde hat. Sie halten fast alle Arten von Unternehmen, die meisten in der „Low tech Herstellung“, darunter unter anderem auch „Öl & Gas“ und „Automobil“ Firmenteile. Es gibt keinen bestimmten Bereich auf den sie ihr ... Ganzen Case öffnen

Chip equity

32,8 Tsd. mal gelöst
Chip equity Unser Klient ist Chip’n‘Chip, eine Holding für Unternehmen aus dem Elektronikbereich.        Sie möchten in OnBoard, ein Platinen Hersteller, investieren und fragen, ob es eine gute Investition ist. Wie würdest du ihnen helfen?
4.5 5 1151
| Bewertung: (4.5 / 5.0) |

Unser Klient ist Chip’n‘Chip, eine Holding für Unternehmen aus dem Elektronikbereich. Sie möchten in OnBoard, ein Platinen Hersteller, investieren und fragen, ob es eine gute Investition ist. Wie würdest du ihnen helfen? Ganzen Case öffnen

Paper Print

14,6 Tsd. mal gelöst
Paper Print A printing company is planning to take over another printing company with similar technology and printing machines. The candidate is supposed to evaluate the acquisition by answering a line of questions that are presented in the “suggested approach” section.
4.2 5 334
| Bewertung: (4.2 / 5.0) |

A printing company is planning to take over another printing company with similar technology and printing machines. The candidate is supposed to evaluate the acquisition by answering a line of questions that are presented in the “suggested approach” section. Ganzen Case öffnen

SuperBurger

12,6 Tsd. mal gelöst
SuperBurger Our client is SuperBurger, a fast food chain that operates in the same class as McDonalds, Wendy's, Burger King and so on. They're the fourth largest fast food chain worldwide in terms of number of stores in operations. SuperBurger owns some of its stores, but 85% of its stores are owned by franchisees. As part of its growth strategy, the company has analyzed some potential acquisition targets including Tasty Donuts which is a growing doughnut producer active in the US and internationally.  The client asked us to help him decide whether he should acquire the company or not. 
4.0 5 1174
| Bewertung: (4.0 / 5.0)

Our client is SuperBurger, a fast food chain that operates in the same class as McDonalds, Wendy's, Burger King and so on. They're the fourth largest fast food chain worldwide in terms of number of stores in operations. SuperBurger owns some of its stores, but 85% of its stores are owned by franchis ... Ganzen Case öffnen

REA Reinsurance

10,8 Tsd. mal gelöst
REA Reinsurance Your client, REA, is a reinsurance company. REA recently acquired another reinsurance company (approximatively same size): the choice of this company was notably based on its product portfolio as well as its market presence which appeared complement with REA. However, the acquisition is not well received by the market. The acquisition price is considered too high and the transaction has not been well graded. REA management asks you to evaluate the transaction.
4.1 5 935
| Bewertung: (4.1 / 5.0)

Your client, REA, is a reinsurance company. REA recently acquired another reinsurance company (approximatively same size): the choice of this company was notably based on its product portfolio as well as its market presence which appeared complement with REA. However, the acquisition is not well r ... Ganzen Case öffnen