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If a buyers pays $1.55 per share to get 6,480,000 shares of the target company such that the total outstanding shares of the target is 12,180,265.

So deal value is $1.55 x 6,480,000 = $10.044M, but is it the Implied EV as well?

Refer to this deal: Telidyne Announces Acquisition of OutSquare MD, Inc.

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    Where's the question in the sentence that starts with "If"?
    – RonJohn
    Aug 13 at 3:12
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Deal value and enterprise value are not the same, even in the event of a 100% sale. The other answer is incorrect to say they are: in a 100% sale, market cap equals deal value, but enterprise value is different.

You calculated deal value correctly: (price per share) x (number of shares purchased)

The implied market cap would use total outstanding shares: (price per share) x (number of shares outstanding)

Therefore, if number of shares purchased equals number of shares outstanding, deal value equals market cap.

Enterprise value is a different concept, and reflects the value of the company across all stakeholders - equity, debt, and sometimes others who have a stake in the value of the company (like pension plans, which we can treat as debt). To calculate enterprise value, you would take the market cap, add debt, add any other stakeholders, and subtract cash (as when you buy the company, you'd pocket the cash it currently holds, thus reducing your effective price).

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No.

Enterprise value is “a measure of a company's total value” (Investopedia). The purchase of some of the shares of the enterprise doesn’t imply that the value of the whole enterprise is equal to the value of this transaction.

Even if you used the share price of the transaction to determine market capitalisation, some would say that it still isn’t necessarily the enterprise value because debts and cash etc haven’t been factored in. Others can argue that in the event of an actual 100% sale, the price would be a de facto reflection of the enterprise’s value.

This answer isn’t financial advice. Please seek appropriate financial advice if you are considering the valuation of an enterprise.

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