Acquisition planning model

Purpose
The purpose of the model is to enable the user to plan up to 10 acquisitions to bolt onto an existing platform asset
 
Outputs
Integrated Financial Statements including Income Statement, Balance Sheet and Cash Flow
Dashboard including key summary financials, results, sales split, sources & uses & exit, funding requirements, cash injection requirements, overall cash flows and valuation & IRR
 
Timeline
The model has a monthly timeline that runs for 8 years
There are annual summaries
A flexible model start date and flexible forecast start date
The ability to include both historical actual data and produce forecast data
The ability to enter historical Profit and Loss balance and an Opening Balance sheet
 
General
The ability to update the model units
The model provides check and commercial alert messages to assist the user
 
Structure
The user can enter up to 10 bolt on acquisitions
The model computes the effective impact on cash flows and returns as a result of structuring additional acquisitions
 
Sales
Entered for the base/platform asset and for each subsequent acquisition
Enter first year forecast sales and subsequent annual sales growth
Sales entered annually and spread evenly over a 12 month period
 
Cost of sales
Entered for the base/platform asset and for each subsequent acquisition
Entered on a gross margin basis
 
Overhead costs
Entered for the base/platform asset and for each subsequent acquisition
Entered as a percentage of total sales
 
Additional overheads / synergistic savings
Enter up to 20 additional overheads / synergistic savings. Assumptions are entered on an annual basis and spread evenly over the year. Enter overheads as negative and savings as positive
 
 
Fixed assets
Entered for the base/platform asset and for each subsequent acquisition
Annual capital expenditure is entered and spread on a monthly basis
Depreciation is calculated on a straight-line basis
 
Working capital
Includes stock, debtors, creditors and VAT (sales tax)
Stock is calculated on a inventory days assumption based on cost of sales
Trade debtors is calculated on a debtor days assumption and based on total sales
Trade creditors is calculated on a creditor days assumption and includes cost of sales, overheads, and capital expenditure
VAT/sales taxes are based on a percentage of non-employee related costs and are paid based on flexible payment flags
 
Income/corporation tax
Enter an effective tax rate and manually enter the tax payments
 
Interest
Interest rates are entered annually for both cash balance and overdraft balances
 
Dividend
Manually entered dividend distribution
 
Deal assumptions
The user can enter up to 10 additional acquisitions
Enter acquisition dates in chronological order
Enter the company valuation and how the acquisition is funded: a mix of up to two deferred annual payments, amounts paid upfront, whether the current owner rolls over some of their existing equity, whether the acquisition is funded from existing cash, vendor loans or senior debt
User can enter interest charges for both vendor loans and senior debt
User defermines the multiple of current adjusted EBITDA that can be funded from senior debt along with the term and the debt arrangement fee
 
Valuation
Ability to enter a date on which the valuation is taken
User enters a terminal growth rate
The discount rate is built up from multiple assumptions and is calculated using a weighted average cost of capital calculation (WACC)
Valuation is calculated using the net present value methodology