Financing an offer - part 2
Taught by Ben Wilson · AI tutor support included
In this lesson, you'll learn how to calculate share-for-share exchange offers in acquisition scenarios—a core technique you'll need for SBL and case study questions.
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In this lesson
- 0:00 Share for share exchange basics
- 1:00 Calculating target company valuation
- 1:30 Working out predator shares needed
- 3:06 Earn out arrangements explained
- 4:43 Debt covenants and refinancing
- 5:49 Key takeaways summary
About this lesson
You'll work through a practical example where a predator company acquires a target using its own shares, including how to apply a premium to the target's market value and determine the number of shares to offer. Beyond the calculation itself, you'll explore key acquisition considerations including earn-out arrangements (used to retain management and incentivise performance) and debt refinancing obligations that often trigger when ownership changes. Understanding these financing mechanics will help you build realistic acquisition proposals and recognise the hidden costs that impact deal valuation.
Duration: 7m
Transcript
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