Order Precedent Transactions Analysis

Order Precedent Transactions Analysis
Order 5992198
Order Precedent Transactions Analysis
1) Using the information provided for Rosenbaum Industries, complete the
questions regarding fully diluted shares outstanding
General Information
Target Rosenbaum Industries
Ticker JNR
Fiscal Year End Dec-31
Marginal Tax Rate 25.0%
Acquirer Pearl Corp.
Ticker PRL
Fiscal Year End Dec-31
Date Announced 11/4/2019
Date Effective Pending
Transaction Type Public / Public
Purchase Consideration Cash
(shares in millions)
Assumptions
Offer Price Per Share $20.00
Basic Shares Outstanding 123.00
Options/Warrants
Number of
Tranche Shares
Tranche 1 $ 1.500 5.00
Tranche 2 $ 1.250 10.00
Tranche 3 $ 1.000 15.00
Exercise
Price
a. Calculate Rosenbaum Industries’ in-the-money options/warrants
Order Precedent Transactions Analysis
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b. Calculate total proceeds from in-the-money options/warrants
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CHAPTER 2
56 CHAPTER 2 QUESTIONS
c. Calculate net new shares from the options/warrants
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d. Calculate fully diluted shares outstanding
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2) Using the prior answers and information, as well as the assumptions below,
calculate Rosenbaum Industries’ equity value and enterprise value
($ in millions)
Assumptions
Total Debt $1,375.0
Cash and Cash Equivalents 50.0
a. Calculate equity value
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b. Calculate enterprise value
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Precedent Transactions Analysis 57
3) Using the information provided for Rosenbaum Industries, complete the
questions regarding non-recurring items
Non-recurring Items
$25.0 million pre-tax payment in regards to a litigation settlement in Q4 2018
($ in millions, except per share data)
Reported Income Statement
Prior Current
FYE Stub Stub LTM
12/31/2018 9/30/2018 9/30/2019 9/30/2019
Sales $2,250.0 $1,687.5 $1,822.5 $2,385.0
COGS 1,525.0 1,143.8 1,235.3 1,616.5
Gross Profit $725.0 $543.8 $587.3 $768.5
SG