Valuing REACH Health Inc. and Exit Strategy: The Sale of Hotmail

Running head: ENTREPRENEURSHIP
Entrepreneurship
Name of the Student:
Name of the University:
Authors Note:

ENTREPRENEURSHIP
1
Table of Contents
Case 9.2: Valuing REACH Health Inc.......................................................................................2
Calculating value of Reach with the help of Multiplies method:...............................................2
Calculating value of Reach with the help of DCF method:.......................................................2
Conducting scenario analysis:....................................................................................................4
Case 10.2: Exit Strategy: The Sale of Hotmail..........................................................................5
Why high growth companies need venture capital and not bank loans:....................................5
Why DFJ was chosen instead of Asian investors by JavaSoft:..................................................5
Stating the clause of father’s investment in the company:.........................................................7
Advantages of investing in stages rather than all at once:.........................................................7
Depicting why Microsoft bought Hotmail:................................................................................7
References:.................................................................................................................................8

ENTREPRENEURSHIP
2
Case 9.2: Valuing REACH Health Inc.
Calculating value of Reach with the help of Multiplies method:
Multiple Valuation
Method
2009 2010 2011 2012 2013
EBITDA (1,180,000) 437,000 4,674,000 9,025,000 14,143,000
Market value of
invested capital
- 6,573,976 70,312,966 135,766,90
6
212,759,152
Particulars Virtual Radiological NightHawk Radiology
Sales 93,280,000.00 166,752,000.00
EBITDA 17,576,000.00 24,824,000.00
MVIC 255,014,704.00 386,698,137.00
MV-to EBITDA 14.51 15.58
Average MV-to EBITDA 15.04
Calculating value of Reach with the help of DCF method:
Enterprise
Valuation
Based on
Free Cash
Flows from
Operations
0 7-Year Competitive Advantage Period (CAP) Post-
CAP
1 2 3 4 5 6