On April 1^st 2014, AqcuirerCo acquired TargetCo's 100% shares. The M&A deal that took place between TargetCo and AcquirerCo with a Fixed Exchange Ratio Structure based on basic shares outstanding. According to the terms of the agreement, AcquirerCo delivered its 150 mil shares to TargetCo in exchange of TargetCo's 100% basic shares. Assumptions are as shown below ($ in million, except per share data; shares in millions).

Offer Price Per Share$25

Acquirer Share Price$75

Acquirer Shares Exchanged 100

TargetCo's Debt $900

TargetCo's Preferred Stock $150

TargetCo's Minority Interest$350

TargetCo's Cash$200

TargetCo's Sales (2014:Q1 Reported Financial Statement)$1500

TargetCo's Sales (2013:Q4 Reported Financial Statement)$3750

TargetCo's Sales (2013:Q3 Reported Financial Statement) $3000

TargetCo's Sales (2013:Q2 Reported Financial Statement) $2000

TargetCo's Sales (2013:Q1 Reported Financial Statement) $1250

Tranches Number of Shares (mil) Exercise Price

#1 100 $26

#2 150 $28

#3 250 $32

What is the Enterprise value (EV) for TargetCo?

$12,450 million

Step-by-step explanation

Notes:

1. As the exercise price of tranches of options outstanding is higher than the offer price under M&A deal, those tranches of shares will remain unexercised.
2. As the TargetCo's Sales is given in isolation with any other related information to determine the value of equity based on the DCF model, such as COGS, EBITDA/EBIT, discount rate, taxes, and growth rate etc, therefore sales figures are not relevant in this case.
3. Exchange ratio = Offer Price per share / Share Price of Acquirer 

= $25/$75

= 1/3

i.e. 1 share of acquirer for every 3 shares of target.

Number of TargetCo's shares outstanding 

= Number of shares of AcquirerCo exchanged * Exchange ratio

=  150 million shares * 3

=  450 million shares

Equity Value of TargetCo = Number of TargetCo's shares outstanding  * Offer Price Per Share

Assuming the offer price as the fair market value based on the M & A deal.  

Equity Value of TargetCo =  450 million shares * $25

Equity Value of TargetCo =  $11,250 million

Calculation of Enterprise value (EV) of TargetCo

Enterprise value (EV) of TargetCo = Equity Value  + Preferred Stocks + Debt + Minority Interest - Cash and Equivalents

Where:

Equity Value = $11,250 million

Preferred Stocks = $150 million

Debt = $900 million

Minority Interest = $350 million

Cash and Equivalents = $200 million

Putting the values in the equation:

Enterprise value (EV) of TargetCo = $11,250 million + $150 million + $900 million + $350 million - $200 million 

Enterprise value (EV) of TargetCo = $12,450 million