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Spin-Off Divestiture Financial Projection Model

User-friendly financial model to project and analyse the financial outcomes of a divestiture transaction involving a spin off

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€‎89.00

User-friendly financial model to project and analyse the financial outcomes of a divestiture  transaction involving the spin off of a subsidiary within a Group.

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The model enables the user to:

  • Determine how the sale proceed fund will be used;

  • Project the pro-forma opening balance sheet post divestiture;

  • Project the financial performance and position (3-statement financial forecast) over a 5-year period including and excluding divestiture transaction;

  • Calculate the intrinsic value of the business including and excluding divestiture transaction using the discounted cashflow (DCF) approach.

  • Understand transaction details in table and chart format

  • Compare financial outcome of business including and excluding divestiture transaction in table and chart format to support decision making process on divestiture transaction.

KEY OUTPUTS

  • Projected full financial statements (Income Statement, Balance Sheet and Cash flow Statement) across 5 years presented on a yearly basis for the business including and excluding the divestiture transaction;

  • Discounted cash flow valuation using the projected cash flow output including and excluding divestiture transaction

  • Ratio Analysis based on projected financial statements

  • Summarised tables and charts showing:

    • Key transaction impact and details

    • Waterfall showing movement in net assets following divestiture transaction

    • Key performance metrics and ratio comparison for business including and excluding divestiture transaction including revenue growth, EBITDA, net profit margin, ROE and debt to equity ratios

    • Key valuation comparison including and excluding divestiture transaction

KEY INPUTS

Setup Inputs:

  • Names of business

  • Name of subsidiary being divested

  • Currency;

  • Transaction close period;

 

Financials Inputs:

  • Latest P&L and balance sheet actuals for overall Group and subsidiary being divested;

  • Projection assumptions for business including and excluding subsidiary being divested which include:

    • Forecast revenue;

    • Forecast cost of sales;

    • Forecast operating expenses including depreciation;

    • Fixed asset additions;

    • Borrowing additions/repayments;

    • Dividend distributions;

    • Tax rate and interest rates;

    • Debtor and creditor days;

    • Inventory percentage of cost of sales;

    • Discount rate and terminal growth rate.

 

Divestiture Inputs:

  • Additional debt raised in spin off entity

  • Special dividend from spin off entity

  • Spin off transaction fees

  • Pro-forma Group opening balance sheet adjustments following divestiture.

MODEL STRUCTURE

The model comprises of 8 tabs split into input ('i_'), calculation ('c_'), output ('o_’) and system tabs. The tabs to be populated by the user are the input tabs which include ‘i_Setup’ for setup assumptions, ‘i_Financials’ for Group / subsidiary actual and projection assumptions and ‘i_Divest Assump’ for the transaction assumptions and pro-forma opening balance sheet adjustments. The calculation tabs takes the user-defined inputs to calculate and produce the projection outputs which are presented in the calculation tabs and ‘o_Dashboard’ tab.

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System tabs include:

  • A 'Front Sheet' containing a disclaimer, instructions and contents;

  • A checks dashboard containing a summary of checks by tab.

KEY FEATURES

  • The model follows good practice financial modelling guidelines and includes instructions, checks and input validations to help ensure input fields are populated accurately;

  • The model enables the user to prepare projections for the Group including and excluding divestiture to assess full financial impact of divestiture;

  • The model is not password protected and can be modified as required following download;

  • The model is reviewed using specialised model audit software to help reduce risk of formula inconsistencies;

  • Apart from projecting revenue and costs the model includes the possibility to model receivables and payables, inventory, fixed assets, borrowings, dividends and corporate tax;

  • Business names, currency and transaction close date are fully customisable;

  • The model included an integrated discounted cash flow valuation for the Group including and excluding divestiture for comparison;

  • The model includes a checks dashboard which summarises all the checks included in the various tabs making it easier to identify any errors.

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