Valuation Hp Merger

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Valuation Hp Merger

Robert F. Bruner, APPLIED MERGERS AND ACQUISITIONS http://www.authorstream.com/Presentation/aSGuest43708-380676-hp-compaq-merger-analysis-entertainment-ppt-powerpoint/ 12
23
Carly’s Big Party Plans 5.0% sales erosion 8.1% EBIT margin (resulting from $2.5BN cost savings) 7.0% net income margin 10.7% ROC Post-merger share price: $24.85
Synergy Calculations
HWP Intrinsic Firm Value 3 6,695,889
CPQ Intrinsic Firm Value 10,682,654
Value of HWP + CPQ without Synergy 4 7,378,542
Value of HWP + CPQ with Synergy 8 2,564,626
Value of Synergy 35,186,083
Price Paid by HWP 2 5,000,000
Increase in Value from Merger 10,186,083 walter 15.0% sales erosion 5.2% EBIT margin 4.7% net income margin 7.2% ROC Post-merger share price: $15.49
Synergy Calculations
HWP Intrinsic Firm Value 3 6,695,889
CPQ Intrinsic Firm Value 1 0,682,654
Value of HWP + CPQ without Synergy 4 7,378,542
Value of HWP + CPQ with Synergy 5 4,295,049
Vale of Synergy 6,916,507
Price Paid by HWP 2 5,000,000
Increase in Value from Merger (18,083,493)

http://mmoore.ba.ttu.edu/ValuationReports/Fall2006/HewlettPackard.pdf http://people.stern.nyu.edu/adamodar/pdfiles/papers/synergy.pdf http://people.stern.nyu.edu/adamodar/pdfiles/eqnotes/AcqValn.pdf http://www.hp.com/hpinfo/newsroom/press/2001/010904a.html www.philiplarson.com/docs/corpfinance-hpcompaq.doc
http://www.exinfm.com/free_spreadsheets.html

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