Merger Model

The last step in the purchase price ratio analysis is to calculate the valuation multiples at the various transaction prices. Doing so allows us to refine...

In our model we will assume that TargetCo's stock options held by employees of TargetCo are replaced upon consummation of the transaction with new BuyerCo...

Now that we have calculated the fair values of TargetCo's vested and unvested employee stock options ("ESOs"), we need only to multiply by the number of...

A portion of the intrinsic value (if any) of the unvested replacement awards is allocated to unearned compensation under FIN 44. The amount allocated to...

The portion of the intrinsic value (if any) of the unvested replacement awards allocated to unearned compensation is recorded as an asset on the balance...

In this step we add to our "Amortization of Identifiable Intangibles" section on our "GAAP" tab and add a section called "Depreciation of Fixed Asset Write-Up"....

In this step we add a section to our accounting adjustments called "Deferred Stock-Based Compensation Expense" that calculates the annual after-tax compensation...

In this step, we write off the target's deferred revenue, recorded on TargetCo's pre-transaction balance sheet as a liability, over a period of 1 year...