Merger Analysis Case Study


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You are to evaluate a potential acquisition and make a recommendation. Download and read the scenario. Download and use the spreadsheet for analysis. Present your analysis as a 3-page report in a Word document formatted in APA style. Document Preview: Merger Analysis \C \E \H \M INPUT DATA: (millions of $) Cash flow data: Inpatient Outpatient Allowances and discount % Other op rev growth rate Patient services exp as a % of net patient rev Percent of net op CF retained for growth Annual inputs: Market data: EBITDA multiple HISTORICAL DATA: Income Statements: (Millions of Dollars) Inpatient revenue Outpatient revenue Gross patient revenue Allowances and discounts Net patient revenue Other operating revenue Total operating revenue Patient services expenses Interest expense Depreciation Total operating expense Net income MODEL-GENERATED DATA: Pro Forma Income Statements: Growth retentions EBITDA Average 5-year EBITDA Value according to DCF method Value according to market multiple method: Year Operating data: Expected number of discharges Required Loans Palmetto General Hospital Cost savings at University Average 5-yr EBITDA Terminal value Valuation Results: KEY OUTPUT: (millions of $) Pro forma net cash flows: Acquisition value: DCF method Market multiple method: Applied to 2000 EBITDA Applied to avg EBITDA Applied to discharges Market value to discharges ratio Net operating cash flow Long-term (2008 and beyond) at Franklin *Interest on *Interest on required loans represents the estimated interest payments on any borrowings required to fund the acquisition. **Cost Savings **Cost savings at Franklin represents any synergistic benefits that will accrue at the acquirer as opposed to at the target. constant growth rate Net cash flow to equityholders Discount rate (cost of equity) Growth in gross revenues (2007-2011): 2007 EBITDA Applied to 2004 EBITDA Applied to average 2004-2008 EBITDA Franklin Teaching Hospital Enter appropriate... Attachments: SU-MHC6305-W3....xls Aug 24 2014 03:00 PM


Solution ID:608966 | This paper was updated on 26-Nov-2015

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