The Design Of DAAE Financing Acquisition ABC Company

The greatest advantage for company listing is convenient for financing, industrialinvestment and industrial integration. Listed companies are not insufficient in fundbut insufficient in good project. Through the analysis on current status of enterprises,it is a significant work for listed companies to formulate specific financing andrestructuring scheme.This paper takes DAAE as the researching object to research the problems ofenterprise financing. The enterprise need to analyze the financing environment beforethe financing. This paper adopts SWOT analysis method to analyze the strength,weakness, opportunity and threats of DAAE. The author thinks that it must conductfinancing and acquiring assets to improve operating situation and get rid of difficultposition. For the plan of acquiring assets, this paper proposes four evaluatingcriterions and selects from the subsidiaries of CCAG. Finally, Company ABC isdecided for the target. Company ABC is a large domestic company which producestransmissions. Company ABC has good profitability and numerous externalcustomers, which can complement with the company business. After the targetcompany for acquisition is selected, this paper assesses the capital with incomeapproach. Due to the high profitability, the value of assessment of company ABC hassharp appreciation compared with its net asset.Due to the high value of assessment of the target company (about3billion), thispaper adopts buyout instead of buying all shares for the option of acquiringproportions of equity, which can ensure the control of ABC, financial statementcombination and company performance promotion, meanwhile, the capital demand is low. In accordance with the equity proportion acquired and combined with the valueof assessment of the target company, the capital demand can be determined. After thedetermination of capital demand, considering the inadequate own capital of DAAE,financing is needed. This paper measures and calculates the bond financing andequity financing. Due to the low profitability and net asset of DAAE, this paperconcludes that DAAE can only acquire company ABC with non-public offering ofstocks for a long time.Finally, this paper designs the procedure of buyout implementation. Considering bothDAAE and company ABC are controlled by CAAG, the transaction forms connectedtransaction; the transaction amount exceeds50%of the company’s net asset, whichforms major assets restructuring; equity transfer invoves state-owned asset transferand issues of submission for approval. Aiming at the three key influencing factors offinancing, this paper designs the procedure specifically.If the above scheme could be implemented, after the acquisition of company ABC,the2011simulating data of DAAE consolidated statements is as follows: salesrevenue will increase133%; profit will increase261%and earnings per share willincrease143%, which make the status of DAAE among the auto parts listedcompanies will rise significantly. In addition, after company ABC becoming listedcompanies, the qualification of open market financing of DAAE will be maintained.If company ABC has a good project, it can conduct financing though securitiesmarket. It is a scheme in favor of DAAE and company ABC.