Cool is unexpectedly approached by a leading global HVAC player that expresses its interest in...

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Finance

Cool is unexpectedly approached by a leading global HVAC player that expresses its interest in acquiring the company to strengthen its position in the ventilation sector. Even though it is not their original plan, Cools shareholders have considered the intangible values and synergies to be backed by an industry giant, thus considering to let the strategic investor come in, but the acquisition must be done in phases. The proposed earn-out structure is as below. Determine the equity valuation at each transaction phase that seems attractive enough so that shareholders are willing to give up their stake.

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