Research On Merger And Acquisition Valuation Of IXYS Based On DCF Model

Along with the continuous improvement of the international economic system and international development of capital markets,mergers and acquisitions are pervasive throughout the world,m&a valuation techniques and methods of constantly improve,mergers and acquisitions in the worldwide frequency has been on the rise,but it is often heard for mergers and acquisitions cases or the emergence of low-cost m&a cases.After the development of m&a valuation,it is not difficult for professional analysts to get a reasonable m&a price,but the results are always unexpected.This always hurts the acquirer or the buyer.In order to clarify whether there is unreasonable merger consideration when IXYS is acquired,the author makes a research on merger valuation.In this paper,the existing basic theories of merger and acquisition valuation were firstly sorted out,and the commonly used merger and acquisition valuation methods were clarified.By reading literatures,the author fully understood the different situations applicable to various methods,and made preliminary preparations for the subsequent analysis of merger and acquisition cases of IXYS.Then is merger cases at IXYS company specific situation to do a thorough analysis,analyzed the main m&a party Littlefuse company based on operating synergy,management synergy,financial synergy in terms of an offer to be the cause of merger and acquisition,and analyze the IXYS company operating conditions of the time are not optimistic,and choose to accept Littlefuse company mergers and acquisitions.And the Littlefuse company after m&a IXYS company operatingperformance evaluation,analysis found that although IXYS company is Littlefuse company acquired a price is the highest ever,but after the operation and development,to the company didn’t have the aid of a significant effect,but decreased in the first year after the merger of return on net assets,different from Littlefuse initial expectations.Therefore,based on the industry in which IXYS is located,this paper decided to use the DCF valuation method to calculate and evaluate the value of the company.Based on the financial statements of IXYS in the past five years,the financial data of the next five years are predicted.The WACC is calculated on the basis of the s&p 500 yield and the interest rate on the 20-year Treasury note.Discount found that the appraisal price is far less than the $750 million offered by Littlefuse company,and the sensitivity analysis of the valuation results,the analysis results show that the $750 million merger price,in the future stable development of the enterprise,is difficult to get such a high price.Combined with the performance evaluation after the merger of Littlefuse company and the valuation results under the DCF valuation method,the conclusion is drawn that the merger price of IXYS company is too high.