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M&A Blog #16 – valuation (Discounted Cash Flow)

Francine Way

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 full list of these items can be found here.

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Best Practices for Due Diligence and Valuation in M&A

Sun Acquisitions

Due diligence and valuation are critical to any successful merger and acquisition (M&A) deal. Discounted Cash Flow (DCF) Analysis: Projects future cash flows and discounts them to their present value. Precedent Transaction Analysis: Analyzes recent M&A transactions involving similar companies.

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The Unseen Hand: Tariffs and Their Profound Consequences on Mergers & Acquisitions

MergersCorp M&A International

Far from being mere taxes on goods, these duties exert a profound and multifaceted influence on the landscape of Mergers & Acquisitions (M&A). This increased risk can lead to a higher weighted average cost of capital (WACC) for the target, further reducing its discounted cash flow (DCF) valuation.

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Delaware Chancery Court Grants Appraisal Rights to Shareholders in DFC Global Corporation Following Acquisition by Private Equity Fund

Shearman & Sterling

The judicially-determined appraisal value reflects an equally weighted blend of (1) a discounted cash-flow analysis, (2) a comparable company analysis, and (3) the actual transaction price of the deal. In re Appraisal of DFC Global Corp., 10107-CB (Del. July 8, 2016). Read more

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Understanding Valuation Techniques in Mergers and Acquisitions

Sun Acquisitions

Mergers and acquisitions (M&A) play a vital role in shaping the business landscape, enabling companies to expand, diversify, and gain a competitive edge. Income-Based Valuation The income-based valuation method focuses on the target company’s ability to generate future cash flows and assesses the present value of these cash flows.

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Methods and Examples on How to Value a Company

Lake Country Advisors

Precedent Transactions Analysis (PTA) Precedent Transactions Analysis (PTA) is a valuation method that analyzes the prices paid for similar companies in past mergers and acquisitions. PTA is useful for understanding market trends and the premium paid for control in acquisition scenarios. million Year 2: $2 million / (1 + 0.10)^2 = $1.65

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Delaware Chancery Court Grants Appraisal Rights to Shareholders in DFC Global Corporation Following Acquisition by Private Equity Fund

Shearman & Sterling

The judicially-determined appraisal value reflects an equally weighted blend of (1) a discounted cash-flow analysis, (2) a comparable company analysis, and (3) the actual transaction price of the deal. In re Appraisal of DFC Global Corp., 10107-CB (Del. July 8, 2016). Read more