I would like to know if you can help me in a valuation that I am currently working on.
-I am valuating company A, which will acquire 100% company B with a 8x ebitda multiple (10M);
-Company B has 2M of net working capital.
-What is the impact in free cash flow of company A? Capex of -10M in company A? Should the 2M of net working capital impact working capital variation in company A?
-What is the impact in capital employed of company A? +10M in gross assets in company A (assuming there is no goodwill)? Or 8M in gross assets and 2M in net working capital?
Thanks in advance.
I would be very grateful if you provide some help to this question.