Pinkerton Case Solution
TOTAL VALUE OF DEAL Rs. 115.56
Rs. 104.62
PINKERTON'S
1987 408.3 381.7 26.6 27 -0.4 1988 363.387 332.4991 30.8879 21.80322 9.084675 1989 323.4144 294.3071 29.1073 19.08145 10.02585 1990 287.8388 260.4942 27.34469 16.69465 10.65004 1991 302.2308 271.2521 30.97866 17.52939 13.44927 1992 317.3423 284.8147 32.52759 18.40585 14.12173
INCOME COServices GROSS PROFIT OP EXP OP PROFIT PBT NET OF TAX
1986 367.7 342.5 25.2 24.5 0.7
0.462
-0.264
5.995886 6.617059 7.029025 8.876518 9.320344
FIX ASSET CHANGE IN EQP WC CHANGE IN WC FCF
15.1
14.53548 12.93658 11.51355 12.08923 12.69369 -3.06452 -1.5989 -1.42302 0.575678 0.604462 38.8 31.25128 23.93267 17.84601 18.73831 19.67522 -7.548718 -7.31861 -6.08666 0.8923 0.936915 16.60912 15.53458 14.53871 7.40854 7.778967
17.6
NPV WACC FINANCIAL BENEFIT INTEREST LOAN PAYMENT
Rs. 84.69 14.97% Rs. 17.49 12.05492 100 8.91 5 13.91 Rs. 17.49 Rs. 17.49 4.59 0 0 Rs. 2.99 8.4645 5 13.4645 4.3605 1.2 0.792 8.019 5 13.019 4.131 1.5 0.99 7.5735 5 12.5735 3.9015 2 1.32 7.128 5 12.128 3.672 3 1.98 10.38693
cost of refinance 10.93542511 NPV
CPP VALUE INC OP PRFT (CPP) NET OF TAX Rs. 13.38
NPV
DEBT COVERAGE FCF (PINKERTON+CPP) CPP ORIGINAL TOTAL FCF(POST ACQ) DEBT SERVICE REQMT 16.60912 16.73458 16.03871 2 2.8 3.1 9.40854 10.77897 4.3 4.4
18.60912 19.53458 19.13871 13.70854 15.17897 13.91 13.4645 13.019 12.5735 12.128
POST DEBT FCF 2.3
4.699124 6.070076 6.119708 6.999124
1.13504 3.050967
13.0692 19.18891 20.32395 23.37491
1993 333.2094 299.0555 34.15397 19.32615 14.82782
1994 349.8699 314.0082 35.86167 20.29245 15.56921
1995 367.3634 329.7087 37.65475 21.30708 16.34767
1996 385.7316 346.1941 39.53749 22.37243 17.16506
1997 405.0182 363.5038 41.51436 23.49105 18.02331
1998 425.2691 381.679 43.59008 24.66561 18.92447
1999 446.5325 400.7629 45.76958 25.89889 19.8707
2000 468.8591 420.8011 48.05806 27.19383 20.86423
9.786361 10.27568 10.78946 11.32894 11.89538
Rs. 104.62
PINKERTON'S
1987 408.3 381.7 26.6 27 -0.4 1988 363.387 332.4991 30.8879 21.80322 9.084675 1989 323.4144 294.3071 29.1073 19.08145 10.02585 1990 287.8388 260.4942 27.34469 16.69465 10.65004 1991 302.2308 271.2521 30.97866 17.52939 13.44927 1992 317.3423 284.8147 32.52759 18.40585 14.12173
INCOME COServices GROSS PROFIT OP EXP OP PROFIT PBT NET OF TAX
1986 367.7 342.5 25.2 24.5 0.7
0.462
-0.264
5.995886 6.617059 7.029025 8.876518 9.320344
FIX ASSET CHANGE IN EQP WC CHANGE IN WC FCF
15.1
14.53548 12.93658 11.51355 12.08923 12.69369 -3.06452 -1.5989 -1.42302 0.575678 0.604462 38.8 31.25128 23.93267 17.84601 18.73831 19.67522 -7.548718 -7.31861 -6.08666 0.8923 0.936915 16.60912 15.53458 14.53871 7.40854 7.778967
17.6
NPV WACC FINANCIAL BENEFIT INTEREST LOAN PAYMENT
Rs. 84.69 14.97% Rs. 17.49 12.05492 100 8.91 5 13.91 Rs. 17.49 Rs. 17.49 4.59 0 0 Rs. 2.99 8.4645 5 13.4645 4.3605 1.2 0.792 8.019 5 13.019 4.131 1.5 0.99 7.5735 5 12.5735 3.9015 2 1.32 7.128 5 12.128 3.672 3 1.98 10.38693
cost of refinance 10.93542511 NPV
CPP VALUE INC OP PRFT (CPP) NET OF TAX Rs. 13.38
NPV
DEBT COVERAGE FCF (PINKERTON+CPP) CPP ORIGINAL TOTAL FCF(POST ACQ) DEBT SERVICE REQMT 16.60912 16.73458 16.03871 2 2.8 3.1 9.40854 10.77897 4.3 4.4
18.60912 19.53458 19.13871 13.70854 15.17897 13.91 13.4645 13.019 12.5735 12.128
POST DEBT FCF 2.3
4.699124 6.070076 6.119708 6.999124
1.13504 3.050967
13.0692 19.18891 20.32395 23.37491
1993 333.2094 299.0555 34.15397 19.32615 14.82782
1994 349.8699 314.0082 35.86167 20.29245 15.56921
1995 367.3634 329.7087 37.65475 21.30708 16.34767
1996 385.7316 346.1941 39.53749 22.37243 17.16506
1997 405.0182 363.5038 41.51436 23.49105 18.02331
1998 425.2691 381.679 43.59008 24.66561 18.92447
1999 446.5325 400.7629 45.76958 25.89889 19.8707
2000 468.8591 420.8011 48.05806 27.19383 20.86423
9.786361 10.27568 10.78946 11.32894 11.89538