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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 http://w4. stern. nyu. edu/~adamodar/New_Home_Page/valuation/val. htm