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Mergers and Acquisitions: Analysis, Financing and Structuring

Duration: 1 day
  • Economics of M&A's
  • Comparable Companies Analysis
  • Precedent Transaction Analysis
  • Cash flow and Returns Analysis
  • LBO Financing Structures and Sources
  • M&A Organization, Preparation and Deal Closing
  • M&A Risk Management
The objective of this seminar is to give you a good understanding of the analysis, financing, structuring and practical implementation of M&A deals. We start with a general introduction to “Mergers and Acquisitions”. We explain the motives for and economics of M&A’s, and we give an overview of the different categories of M&A deals. We also give an overview of the history of M&A and explain how M&A activity has been driven by economic growth, deregulation, falling interest rate levels etc.

We then take a closer look at M&A valuation. We explain how companies and proposed transactions can be analyzed and compared using statistics, key ratios and multiples, and by “benchmarking” of comparable companies. We also explain how a company’s “value drivers” such as sales growth, profitability and taxed can be analyzed and how “free cash flows” can be estimated and valued.

Further, we present, explain and discuss techniques and instruments tools for analyzing and financing “leveraged buy-outs”. We explain two routes to valuing the target company, the FCC method and the “equity cash flow method”, and – using a realistic case study – we give a complete example of how to project the “cash sweep” for alternative debt structures, how to calculate the terminal value, and how to evaluate the deal using different measures of return. We also explain the characteristics of the different debt instruments used to finance LBO deals, including senior debt, subordinated/junior debt, and mezzanine finance and equity layers.

Finally, we look at the practical implementation of M&A deals. We outline the M&A process and we explain how deals are prepared, negotiated, and closed. We also discuss the risks involved in buy-outs and other M&A deals and explain how these deals can be managed through proper due diligence.

Day One

09.00 - 09.15 Welcome and Introduction

09.15 - 10.15 Mergers and Acquisitions – Motives, Categories and Historical Developments

  • Distinction between Mergers and Acquisitions
  • Categories of Mergers
    • Takeovers/buyouts/leveraged buyouts
    • Friendly vs. hostile deals
    • Reverse takeovers
  • Economics of M&As
    • Motives behind M&As
    • How value can be created through M&As
    • Effects on management
  • Historical Development
    • Deregulation and low interest rates
    • The great merger movements

10.30 - 12.00 Valuation for M&As

  • Comparable Companies Analysis
    • Spread key statistics, ratios and trading multiples
    • Benchmarking of comparable companies
    • Determine valuation
  • Precedent Transaction Analysis
    • Location of necessary deal-related information
    • Spread key statistics, ratios and trading multiples
    • Benchmarking of comparable companies
    • Determine valuation
  • Discounted Cash Flow Analysis
    • Key performance drivers
    • Free cash flow analysis
  • Valuation of Combined Businesses
    • Synergy effects
    • Conglomerate discounts
  • Case study and Small Exercise

12.00 - 13.00 Lunch

13.00 - 14.30 Leveraged Buy-Outs

  • Key Participants
  • Characteristics of a Strong LBO Candidate
  • Economics of LBOs
    • Value drivers
    • The cash sweep
    • Returns analysis
  • Exit/Monetization Strategies
  • LBO Financing
    • Structure
    • Primary sources
    • Selected key terms
  • Case Study and Small Exercise

14.45 - 15.45 The M&A Process

  • The M&A Sales Process
  • Organization and Preparation
  • First Round
  • Second Round
  • Negotiation
  • Closing
  • Risk Management

15.45 - 16.00 Evaluation and Termination of the Seminar