Build an M&A Model - Apple Acquires Disney

Overview This exercise walks you through building an integrated M&A model for Apple’s acquisition of Disney. You will practice calculating fully diluted shares for both the acquirer and target, applying transaction assumptions, and analyzing how deal structure choices affect outcomes. The model allows you to toggle assumptions such as refinanced vs. assumed target debt, stock sale vs. asset sale tax treatment, and GAAP EPS vs. cash EPS. The exercise focuses on understanding how the key components of an integrated M&A model connect, from transaction mechanics to EPS outcomes, including accretion and dilution analysis. Learning Goals Understand real-world transaction assumptions: Go beyond calculating diluted shares to defining deal structure, with a focus on transaction financing. Master transaction mechanics: Complete the Sources & Uses sections and perform asset write-ups and purchase price allocation. Build pro forma financials: Incorporate new debt, interest expense, and incremental D&A to evaluate the impact on pro forma EPS. Analyze accretion/dilution: Assess whether the transaction is accretive or dilutive, and use sensitivity analysis to understand how changes in deal assumptions affect EPS. Key Concepts Accretion: The increase in the acquirer’s EPS following a transaction. Dilution: The decrease in the acquirer’s EPS following a transaction. Sensitivity Analysis: Evaluates how changes in key assumptions (e.g., offer price or stock consideration) impact accretion/dilution. Pro Forma EPS: EPS adjusted for transaction effects such as financing, D&A, and synergies. Sources of Funds: Where acquisition financing comes from (cash, debt, or stock). Uses of Funds: How acquisition capital is deployed, including purchase price, fees, and debt repayment. Asset Write-Ups: Adjustments to the target’s assets to fair value, affecting post-transaction depreciation and amortization.

Practice Build an M&A Model - Apple Acquires Disney with interactive Excel modeling exercises in our M&A Modeling module.

This hands-on modeling exercise helps you master Build an M&A Model - Apple Acquires Disney through real-world Excel practice and financial modeling techniques.