mastering mergers & acquisitions
TRANSCRIPT
MASTERING MERGERS & ACQUISITIONS Learn the practical strategies, tools and techniques for successful mergers and acquisitions
Contact:www.iff-training.com+44 (0)20 7017 [email protected]
Whatever the circumstances surrounding an acquisition whether it is a mutually satisfactory transaction or one that is being resisted there are complex agreements, tactics and strategies for you to consider. This course has been developed to give you an understanding of the key topics including; the governing regulations, financing options, cashflow and the tax and accountancy consequences.
Throughout the course, you will benefit from numerous real-life case examples to help you put the theory into practice
DURING THREE-DAYS YOU WILL LEARN:. The commercial evaluation of M&A opportunities. New and enhanced techniques for valuing firms. Practical pricing analysis. The role of private equity in M&A. Keys to successfully managing the different aspects
of the acquisition process. How to deal with complex financing issues
COURSE LEADERRICHARD CAPPS
Richard has a unique blend of experience in Law, Corporate Banking, Investment Banking, Corporate Financial Management, General Management and Workout. This breadth of experience provides for a rich perspective of Corporate Finance. Richard:
. Has trained as a lawyer at Cambridge and the Middle Temple and was called to the English bar
. Was a corporate relationship manager for an American Bank in New York and London
. Has spent six years as a corporate finance executive within investment banking in Hong Kong and London, primarily involved in mergers and acquisitions and corporate restructurings
. Has spent six years as a CFO of a public group with a joint head office in the United States and Australia. In this role he was engaged in over 15 acquisitions, over 20 equity raisings and a large number of complex financings, many of them structured on a limited recourse basis
. Was responsible for the workout of a company in severe financial difficulties, being appointed as General Manager by KPMG
. Has for the past 20 years Richard has acted as an independent consultant and financial trainer. Over this time he has developed and delivered the IFF courses in M&A, Corporate Valuation and Corporate Finance
COURSE INFORMATIONABOUT IFFIFF has been delivering training courses to finance professionals since 1991. We are part of Informa PLC and the learning partner of RiskMinds, SuperReturn, FundForum and GAD series of events.
• We continually develop and improve our training tomake it more effective for you
• You’ll experience interactive and practical training -implement what you learn straight away
• You’ll learn from practising, highly-experiencedfinancial experts
• We limit class size so the trainer can adapt the contentto suit you
DATES & PRICE Please contact a member of our team for more details
CONTACT US
+44 (0)20 7017 [email protected]
www.iff-training.com
IN-COMPANY TRAININGIFF’s bespoke training solutions will help you address your specific key business challenges. The programme is designed for you, with content focusing on the issues you and your teams are facing. The course can then be delivered at your choice of location face-to-face, digitally or a combination of the two.
. Tailored content - 100% targeted to cover your needs
. No travel or time out of the office – we will come to you
. Value for money – train teams of staff at the same time
. Risk free – we’ve been doing this for over 30 years
For more information please contact:
Leigh Kendall on +44 (0)20 7017 7190 oremail: [email protected]
COMMERCIAL EVALUATION OF ACQUISITION OPPORTUNITIES
Overview of the Planning ProcessWe start by looking at the ‘big picture’ – the objectives of the acquirer, the rights of access to the cashflows and assets of the target company, and the ‘affordability’ of the acquisition• Projection and valuation of both companies• Quantifying and valuing synergies• Estimating the potential cashflow volatility• Financial assistance laws• Method and quantum of cash extraction from the
target company• Debt capacity calculation• Accounting consolidation
The Key Analytical IssuesA coherent analytical process is essential. Understanding the balance of cash/accounting implications, risk/return and price/value is central for both purchaser and vendor• Cashflow vs. accounting issues• Earnings dilution and earnings accretion• Price vs. value• Risk and return• Quantification and pricing of risk• Free cash flow• Return on capital and hurdle rates
Overview of DCF ValuationA walk-through of the valuation of a prospective target company• Time horizons• Minimum required returns• Risk free rate selection• Approaches to the share market premium• Problems in the use of betas• XNPV and EXP discounting• Valuation of perpetuity and appropriate adjustments• Subjecting the valuation to sensitivity• Practical application and decision-making• Frequently encountered errors in valuation models
EXERCISEIllustrations of completed valuations
PricingWhere the target company is not listed, it is an important analysis for both purchaser and vendor to assess the market’s appetite for such acquisitions• Frequently encountered errors in practical
implementation• The adjustments necessary• Assessing the control premium• When pricing models or analysis are not applicable
EXERCISEIllustrations of pricing analyses
Private EquityA major factor in M&A markets is the role of private equity and the use of leveraged finance. Financial buyers, with modest levels of synergy can frequently outbid trade buyers with substantial synergy. We need to delve into the reasons why this is so• Structure of private equity funds• The implications and constraints of the investment
period and the fund maturity• The forms of exit• The 5 drivers of the private equity fund’s IRR• Why private equity can outbid synergistic acquirers• The consequences of the current market turmoil for
PE portfolios• The likely changes in future regulation• MBOs
– the negotiation and documentation process
Contact:www.iff-training.com+44 (0)20 7017 [email protected]
COURSE AGENDA– the manager’s ratchet– vendor loan notes– PIK instruments
EXERCISEIllustrations of leveraged buyout
THE ACQUISITION PROCESS
Processing the SaleThe organisation of the sale, and a review of the regulatory framework, not only in the EU, but also highlighting areas where they vary from those applying in the USA, Asia and elsewhere• The different forms of M&A activity• The importance of gaining the recommendation of
the incumbent board• Schemes of arrangement under corporate law –
special resolutions• The role of investment banks, reporting accountants,
lawyers, PR firms, stockbrokers• The fiduciary duties of the vendor’s directors• Managing the negotiation – overview of the process
and the timetable• Sale mechanics - open tender, closed tender, dual
track, parallel sale, exclusive one-by-one• Mandate letter and confidentiality agreements• Selling memoranda, provision of information and
confidentiality• Competitive tension• Winner’s curse• European Takeovers Directive
– historical evolution and compromises– applicable law– rules for protection of minority shareholders– dissemination of information– timetable– the opt-outs – defensive actions of incumbent
board, break-through rights– squeeze-out rights– administration
• Antitrust, monopolies and competition law
Recommended OffersAn agreed and recommended offer, primarily comes down to the negotiation of the terms and conditions as set in the Sale & Purchase Agreement – particularly on issues such as warranties, contingencies and exclusions. We carefully identify the key factors in that negotiation• Exclusivity agreements and break fees• The due diligence procedure – the issues, timing,
and team work• Purchase the shares or the assets? – pros and cons• The structure of the offer – cash and other forms of
consideration• Restrictions on vendor competition• Review of a Sale and Purchase agreement
– conditions precedent– warranties– indemnities– carve-outs and exclusions– price adjustments, deferred payments, escrow– payment profile– restriction of rights– confidentiality, public communications– material adverse change
• Post-acquisition integration
Contested and Hostile BidsMany initially hostile approaches end up as recommended offers after successful negotiations are concluded post-bid. But if the bid continues in the absence of agreement, the battle is one of strategy and tactics• Defensive structures
– constitutional provision– poison pills
– shark repellents– crown jewel lock-ups– leveraged restructuring– Pac man– white knight, white squire– greenmail– parachutes
• Implementation– announcements– role of advisors– the documents required and the timetable– pros and cons of launchpad holdings– mandatory offers and whitewashes– pitching the price– significance of Day 46– the form and structure of the offer– arbitrageurs and the arbitrage spread– multiple offers– offer conditions– vendor placings
• Market activity– implications of share purchase and sale
ahead of bid announcement– permissible transactions during offer period– the treatment of contingent rights to shares– concert parties– offences related to transactions in shares
FINANCING ISSUES
Financing StructuresThe financing can take many forms. We create a decision framework that correlates the characteristics of the particular transaction to the most suitable financing approach• Forms of consideration• The structure of the bid – merits of cash, paper,
or mixed offers• Implications of the various financing sources• Does the financing depend on target company
cashflows?• Debt capacity analysis• Tailoring of amortisations to cashflow
generation• Workarounds to the financial assistance laws• Cash sweeps and their effect on the IRR• The effect of leverage on the risk/return
equation• Second lien financing• Mezzanine finance vs. high yield bonds• Two-phase financing, bridge financing• Vendor notes• Convertible debt• Warrants• Forms of equity raising• Deferred consideration• Dividend implications, special dividends• Asset strips• Leverage:
– characteristics of A, B, C and revolving credit tranches
– multi-tiered holding companies– inter-creditor issues, priority deed
• LMA standard form leveraged finance documentation
Specialised TopicsWe conclude with some examples of specialised situations • Joint ventures
– rights of pre-emption– matching rights– put options are is contingent deferred
consideration (earnouts)– venturer’s agreement
• Earnouts– control issues– audit of performance data– protective clauses
CPD Certified:
IFF is recognised by the CPD Certification Service and have been approved to award CPD points towards professional development certifications. Attendance at this course will earn you 40 CPD points.
COURSES IN THE IFF CORPORATE FINANCE PORTFOLIO
See the website for full details www.iff-training.com
ASSET SECURITISATIONA detailed, practical guide to the opportunities and mechanics within Asset Securitisation
Dates:28-29 November 201927-28 April 2020 London
Contact:www.iff-training.comTel: +44 (0)20 7017 7190Email: [email protected]
F TH HE MECHANICS O
PRIVAEQUI
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6 WEEKS
GRADPOSTY DELIVERED B
TETIFICAATETE CERAATE CERDUVER 16 ANCE LEARNING OY DIST
Contact:.iff-training.comwww
el: +44(0)20 7017 7190TEmail: [email protected]
Dates:10 July 201904 December 2019 Learning
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THE MECHANICS OF
CORPORATE FINANCE
Contact:www.iff-training.comTel: +44(0)20 7017 7190Email: [email protected]
Dates:9 October 20191 April 2020
POSTGRADUATE CERTIFICATEDELIVERED BY DISTANCE LEARNING OVER 16 WEEKS
Learning partner of
THE MECHANICS OF
INTERNATIONAL TRADE FINANCE
Contact:www.iff-training.com/pfdl Tel: +44(0)20 7017 7190Email: [email protected]
Dates:22 May 20196 November 2019
POSTGRADUATE CERTIFICATEDELIVERED BY DISTANCE LEARNING OVER 16 WEEKS
Learning partner of
THE MECHANICS OF
TRANSACTION BANKING
Contact:www.iff-training.comTel: +44(0)20 7017 7190Email: [email protected]
Dates:24 July 2019 4 December 2019
POSTGRADUATE CERTIFICATEDELIVERED BY DISTANCE LEARNING OVER 20 WEEKS
Learning partner of
IFF is the learning partner of
CORPORATE CREDIT RISK ANALYSISA practitioner’s guide to analysing corporate credit risks in today’s volatile markets
Dates:17-18 October 20191-2 April 2020 London
Contact:www.iff-training.comTel: +44 (0)20 7017 7190Email: [email protected]
THE MECHANICS OF
MERGERS AND ACQUISITIONS
Contact:www.iff-training.comTel: +44(0)20 7017 7190Email: [email protected]
Dates:9 October 20191 April 2020
POSTGRADUATE CERTIFICATEDELIVERED BY DISTANCE LEARNING OVER 16 WEEKS