MAKES YOU BETTER CASE
Background:
Makes You Better is a biopharmaceutical company located in Eastern Europe. The pharmaceuticals company in U.S was considering acquiring it. They retained Dash Rip Rock who is a mergers and acquisitions consultant in order to find out the fair value of Makes You Better Company by using different financial techniques.
Valuation by Using Multiple Techniques:
By applying mean value and median value of the trading multiples, the estimated equity value of Makes You Better Company on average are $44,214 and $432,002. The worth of the company should not be less than the calculated estimated equity value. The estimated total debt of the company is $19,150,000
Valuation by Using discounted cash flow analysis:
The valuation of Makes You Better by using discounted cash flow analysis shows that the estimated revenue of the company would increase after 5 years on yearly basis (2008-2012) from their actual revenue which was $2,329 in 2007. The estimated NPV is positive which is showing that company will have more cash inflows than cash outflows. Total cash flows of the company are expected to increase during the 5 year time period. The Makes You Better Company will get more benefit by entering into the Western Europe as compared to the option of not entering into the Western Europe. The expected result get from DCF analysis is showing much better valuation of the Makes You Better Company...............................
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