Chapter_9收购、兼并和重组课后题目

M&A Model Building Process
• Step 1: Value acquirer and target as standalone firms • Step 2: Value acquirer and target firms including synergy • Step 3: Determine initial offer price for target firm • Step 4: Determine the combined firms’ ability to finance the transaction
Ch. 18: Cross-Border Transactions
Learning Objectives
• Primary learning objective: Provide students with a basic understanding of how to use financial models to value and structure M&As • Secondary learning objectives: Provide students with a knowledge of – How to estimate the value of synergy; – Commonly used relationships in building M&A valuation models; and – How to use models to estimate the purchase price range, initial offer price (and other key deal characteristics)1 for a target firm, and to evaluate the feasibility of financing the proposed offer price.
Ch. 2: Regulatory Considerations
Ch. 5: Search through Closing Activities
Ch. 8: Relative Valuation Methodologies
Ch. 12: Accounting & Tax Considerations
Ch. 16: Divestitures, Spin-Offs, Split-Offs, and Equity Carve-Outs
Ch. 3: Takeover Tactics, Defenses, and Corporate Governance
Ch. 6: M&A Postclosing Integration
• Valuation – How much is the target company worth without the effects of synergy? – What is the value of expected synergy? – What is the maximum price the acquirer should pay for the target firm? • Financing – Can the proposed purchase price be financed? – What combination of potential sources of funds, both internally generated and external sources, provides the lowest cost of funds for the acquirer, subject to existing loan covenants? • Deal Structuring – What is the impact on the acquirer’s financial performance if the deal is structured as a taxable rather than a nontaxable transaction? – What is the impact on financial performance and valuation if the acquirer is willing to assume certain target liabilities?
Using Financial Modeling Techniques to Value and Structure Mergers & Acquisitions
Tact is for people not witty enough to be sarcastic. --Anonymous
Exhibit 1: Course Layout: Mergers, Acquisitions, and Other Restructuring Activities
Key questions: 1. How might changes in the bargaining power of customers and suppliers relative to the acquirer and target firms impact product pricing, costs, and profit margins?
Step 1: Value Acquirer & Target as Standalone Firms
• Use the 5-forces model to understand determinants of profits and cash flow, i.e., bargaining strength of – Customers (size, number, price sensitivity) – Current competitors (market share, differentiation) – Potential entrants (entry barriers, relative costs) – Substitutes (availability, prices, switching costs) – Suppliers, incl. labor, lenders, etc. (size, number, uniqueness) relative to industry participants. • Normalize 3-5 years of historical financial information • Project normalized cash flow based on expected market growth and changes in profits/cash flow determinants.
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key deal characteristics include form of payment, form of acquisition, and tax considerations.
Financial Models Help Answer Key Valuation, Financing, and Deal Structuring Questions
2.
How might substitutes and new entrants affect product pricing and profit margins?
Step 2: Value Acquirer & Target Firms Including Synergy
• Estimate – Sources and destroyers of value – Implementation costs incurred to realize synergy • Consolidate acquirer and target projected financials including the effects of synergy • Estimate net synergy (consolidated firms less values of target and acquirer)
Ch. 9: Financial Modeling Techniques
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Ch. 13: Financing the Deal
Ch. 17: Bankruptcy and Liquidation
Ch. 10: Private Company Valuation
Ch. 14: Valuing Highly Leveraged Transactions
Ch. 1: Motivations for M&A
Ch. 4: Business and Acquisition Plans
Ch. 7: Discounted Cash Flow Valuation
Ch. 11: Payment and Legal Considerations
Ch. 15: Business Alliances
Part I: M&A Environment
Part II: M&A Process
Part III: M&A Valuation and Modeling
Part IV: Deal Structuring and Financing
Part V: Alternative Business and Restructuring Strategies
Under what circumstances would the acquisition make sense?
Adjusting Combined Acquirer/Target Company Projections For Estimated Synergy