MODEL OVERVIEW
 
An equity sale of a business involves the transfer of ownership by selling shares or ownership interests in the company to a buyer. In this type of transaction, the buyer acquires part or all of the business itself. Equity sales are common in mergers and acquisitions, succession planning, or when raising growth capital.
 
Our comprehensive equity sale financial model is designed for business shareholders seeking to sell equity stakes to financial institutions or private investors. It provides them with a structured framework to project and analyse the financial outcomes of an equity sale. Specifically, it equips users to:
Determine indicative valuation of the business: Utilise discounted cash flow (DCF) and comparative analysis methods to determine the company’s intrinsic value and the ideal equity offer price.
Model Equity Sale Proceeds: Calculate gross and net equity sale proceeds, incorporating primary and secondary share allocations as well as fees.
Determine Ownership Changes: Assess the impact of the equity sale on ownership structures and issued share capital.
Evaluate Post-Sale Valuations: Analyse post-sale valuations after investing the proceeds, providing insights into returns for both existing and new shareholders.
Compare pre and post sale Financial Metrics for the business: Contrast key financials and ratios pre- and post-sale to gain a clearer understanding of the impact of any primary share allocations.
Run Scenario Analyses: Explore various scenarios for key equity sale variables to assess potential impacts and prepare for uncertainties.
 
This model adheres to best practices in financial modelling, incorporating clear instructions, checks, and input validations to ensure accuracy and ease of use.
 
 
KEY OUTPUTS
 
Key equity sale outputs including offer price, valuation, gross and net equity sale proceeds, issued share capital and postsale ownership and returns
Valuations pre and post sale to determine ideal offer price, impact of equity sale and returns for new and existing shareholders
Projected full financial statements (Income Statement, Balance Sheet and Cash flow Statement) across 5 years presented on a yearly basis for the company pre and post sale;
Ratio Analysis based on projected financial statements
Charts comparing pre and post sale key financial metrics and ratios
 
 
KEY INPUTS
 
Setup Inputs:
Names of transaction and company;
Currency;
Equity sale date;
Companies for comparative analysis;
Naming for current and new shareholders
Naming for equity sale scenarios;
 
Assumptions:
Latest P&L and balance sheet actuals;
Forecast income statement and balance sheet assumptions with and without equity sale primary share proceeds
Valuation inputs including key financials for comparative companies, discount rates and terminal growth rates;
Equity sale assumptions including offer price discounts, primary and secondary share and expected Equity sale fees under 3 scenarios.
Proforma opening balance sheet adjustments.
 
 
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 model and transaction general assumptions and ‘i_Pre_Sale for specific projection assumptions relating to the company pre-equity sale and ‘i_Sale_Assump’ for the detailed equity sale assumptions. The calculation tabs uses the user-defined inputs to calculate and produce the projection outputs which are presented in the calculation tabs and ‘o_Dashboard’ 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 across 5 years and valuations for the business on a pre and post-sale basis;
The model includes the possibility to model 3 scenarios for key equity sale assumptions including offer discount rates, equity sale fees and expected changes in projections post sale.
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 name, currency, timeline and equity sale date are fully customisable;
The model included valuations on both discounted cash flow basis (DCF) and comparative analysis basis with user-define weights for each approach;
The model includes a checks dashboard which summarises all the checks included in the various tabs making it easier to identify any errors. 
 
SUPPORT / MODIFICATIONS
 
We are keen to ensure our customers are satisfied and find the models useful for their financial projection needs. Our models are developed with the user in mind and include instructions, line-item explanations, checks and input validations to ensure they are as user-friendly and easy to use as possible without requiring extensive knowledge of Microsoft Excel, finance or accounting. If any questions do arise, we are more than happy to assist. We are also happy to support with any be-spoke modifications you may require to the models to better suit your business needs. To get in touch, please send us a message through the website or contact us on: hello@useprojectify.com
 
We are also always keen to receive feedback so please do let us know what you think of our models by sending us a message or submitting a review.