What You’ll Learn In This Video
You’ll learn how to combine the buyer and sellers’ balance sheets in an M&A deal, taking into account purchase price allocation, transaction assumptions, and the deal structure in this lesson.
In this second lesson, you’re going to learn how to combine the balance sheets, make the necessary adjustments, and ensure that everything balances post-transaction.
We’ll be using United Technologies’ $16 billion acquisition of Goodrich Corporation for our example here, and you’ll learn even more since this is a very “real-world” example.
In addition to the standard adjustments, you’ll learn about some trickier points that are easy to forget when you’re combining the balance sheets – and you’ll learn how to ensure that your model handles all scenarios.
You can follow along using the “Before” Excel file above and then check your work with the “After” Excel file.
Coming up next, we’ll continue with the model and move into how to calculate revenue and expense synergies in the deal.
Files & Resources
- United Technologies - Equity Research
- United Technologies - 10-K
- Goodrich - Equity Research
- Goodrich - 10-K
- Bloomberg - Press Release on Deal
Quick Reference Guides
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