Cross-Border M&A Modelling

Client: Publicly-traded industrials company

The company was looking to expand their operations through the strategic purchase of a US-based entity with a price range of US$20-60M. Key to making the deal work and raising mezzanine debt financing was determining the right price without overpaying. They engaged Sapling to assist with the due diligence process.

3 Key Insights:

We developed a best-in-class financial model showing separately both the Acquirer’s financials and Canadian tax forecasts, as well as the Target’s operations and financials and US tax forecasts.

 

The model has the US entity operate separately and pay dividends out as cash becomes available, showing the true impact on cash flow, and allowing for precise calculations of NPV and IRR across different scenarios.

 

The model was presented to the Board and became essential in making decisions on the price of the bid.

Target Net Cash VS Dividends to Acquirer (USD)

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