Gather the Necessary Business and Financial Information About Each Precedent Transaction
Once a list of comparable transactions has been complied, the next step is to find the relevant data related to those transactions. On the 8-K, which was filed at the time the transaction was announced, we found the following information:
- • Canin purchased Northwest Design for a total cost of $1.28 billion.
- • The purchase price included the payment of $36 in cash per share of Northwest Design’s outstanding securities.
- • As a result of the transaction, Canin assumed Northwest Design’s $29 million in net debt. That debt consisted of total interest-bearing debt of $35 million minus cash/cash equivalents of $6 million.
The proxy statement (Schedule 14A), which follows this type of announcement, helps to explain many of the details of a proposed merger while also offering information related to stock price valuation and premiums paid. As such, it is a valuable tool in helping to provide insight into a deal’s background, dynamics, and ultimate course of action. Northwest Design’s proxy statement revealed that the company had 34.75 million outstanding shares (with no options, warrants, or convertibles). It also revealed that Canin’s $36 per share price represented a 33% premium over the prior market rate for those shares, which was $27.06 per share.
Northwest Design’s annual and quarterly reports, its 10-K and 10-Q filed with the SEC, also include financial information necessary for overall valuation. Here is a look at an input sheet that contains important data related to that transaction:
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Input Page for the Acquisition of Northwest Design by Canin Corp.: (in millions, except earnings per share) |
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General Information |
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Price per share |
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