BLUNTLY MEDIA: A PRIVATE COMPANY VALUATION

BUSINESS VALUATION AND FINANCIAL MODELLING

SUBMITTED BY:
Srikant Sharma

SUBMITTED TO: Dr. Nidhi Kaicker

SCHOOL OF BUSINESS, PUBLIC POLICY AND SOCIAL

ENTREPRENEURSHIP
AMBEDKAR UNIVERSITY DELHI

CASE FACTS
Paterson Publishing Company: It was a Fortune 200 publishing and printing company that
provides products and solutions related to commercial printing and integrated communications.
It is the buyer company that shows interest to buy Bluntly Media.
Bluntly Media: The co. was founded in 1990, and was a private direct marketing agency that
provided print and digital marketing solutions for a broad range of clients, retailers, banks,
newspaper & magazine publishers. It is the company to be bought by Paterson Publishing.
Slatestone: It is one of the 3 companies given in the case, and its role is to represent Bluntly
Media, advise it and facilitate its eventual sale to a suitable buyer at the right price.
Jackson Ferdy: An intern at Slatestone who has given the task of valuation of Bluntly Media.

Calculation of WACC
For beta calculations, average of unlevered beta has been taken which is given.
Formula for Levered beta= unlevered beta*(1+ (1-tax)D/E ratio).
The Tax Rate, Risk free rate and Cost of Debt are given in the case only which is 35%, 2.69%
and 3.7% respectively.
WACC= D/V*Kd(1-tax)+E/V*Ke = 5.7%

PV of the firm by FCFF

The growth rate has been assumed to be 3.2% (exact), which is also the industry growth rate.
Projection for Sales are made on the basis of assumed growth rate.
Projections for Cost of sale, operating expenses, other current assets and depreciation has been
made on the basis of the average of previous years.
Working capital= Current Assets Current Liabilities
Capex= Change in Fixed Assets
FCFF= EBIT(1-tax) + Depreciation Change in WC Capex
PV of Terminal Value = K41/((1+C55) ^5), this is for 5 years @WACC calculated for the
calculated TV.
2

So, PV of the Bluntly Media comes out to be 28461.06.