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What you'll learn...
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In two dynamic, fast-paced days you will learn the key aspects of the merger and acquisition process and the business valuation techniques that are an integral part of an M&A transaction. Software and online resources related to this topic will be illustrated on a large, interactive computer screen at the front of the room. This practical, nuts 'n' bolts seminar is designed to give you the essential and timely information you need to fully understand the M&A process.
This seminar focuses on the M&A transaction with an overview of valuation procedures. For an extensive two-day workshop on valuation methodology and techniques, please attend NCCE's two-day seminar, How to Value an Acquisition or Division: Business Valuation and Modeling Using Excel™.
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Seminar Agenda
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Mergers, Acquisitions and Strategic Analysis
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- Overview of M&A Activity
- Volume of Activity and Size of Deals
- Reasons for M&A Waves
- M&A Successes and Failures
- Reasons for Failures
- Key Ingredients for Success
- Role of Mergers in Business Development
- M&A as One of Several Methods to Grow the Organization
- Merger Strategies — Reasons and Justifications for Mergers
- Economies/Synergies
- Diversification
- Buy vs. Build and Capital Costs
- Strategic Realignment of Organization
- Other
- Case Study — Review of Strategy Issues
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Overview: Steps in the M&A
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- Screening Candidates
- Due Diligence and Financial Analysis
- Valuation of a Business
- Deal Structure and Valuation of Securities
- Integration
- Organizing the Firm for M&A
- Skill Sets/Staffing Requirements
- Organizational Structure
- Decision Process
- Integration Process
- Role of Investment Bankers
- Types of Mergers
- Friendly vs. Unfriendly
- Analysis of ‘Defensive Strategies’
- M&A Resource Material
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Background Understanding for M&A
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- Accounting Issues
- Purchase Transactions; FASB 141
- Goodwill Write-off Policies
- Legal Issues: SEC, FTC and Department of Justice
- Pre-merger Notification Requirements
- Antitrust Guidelines and Issues
- Constructing the Acquisition Contract
- Legal Framework and Key Covenants, Terms and Conditions
- Typical Purchase Agreements
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Understanding Tax Implications of M&As
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- Tax-free Exchanges
- Taxable Transactions
- Tax Consequences for Buyers and Sellers
- Step-up vs. Carry-in the Basis
- Allocating Acquisition Purchase Price
- Limits on the Use of NOLs: IRC Sections 382, 384 and SRLY Rules
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Due Diligence and Financial Analysis
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- Due Diligence Explanation
- Things to Look for — Checklists
- Hidden Assets and Liabilities
- Understanding the Business
Case Study — Review of Due Diligence Issues
- Financial Analysis
- Differences Between Small and Large Firm Financial Statements
- Potential Distortions: Inventory Valuations, Goodwill, R&D, Over- or Under-funded Pensions, Deferred Taxes,etc.
- Recasting the Balance Sheet
- Normalizing Income for Analysis and Valuation
- Pro forma Financials Following the Acquisition
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Selecting a Sample of Comparable Companies and Online Data Sources for Screening Candidates
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- Determining What Constitutes a Comparable Company
- Online Sources of Information
- Private Companies
- Public Companies
- Searching/Screening Online
- Building an Acquistion "Pipeline"
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Business Valuations
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- Overview of Various Valuation Frameworks
- Asset Valuations — Balance Sheet Framework
- Earnings Valuations
- Discounted Cash Flow Valuation
- Definition of Cash Flow
- Terminal Value Alternatives
- Determining the Discount Rate
- Determining the Forecast Period
- Excess Earnings Defined
- Free Cash Flow Explained
- Equity Discounted Cash Flow Valuation vs. Asset DCF Approach
- Capitalization Rates, Approaches and Justifications; Understanding the Build-up Approach
- Market Comparables
- Multiple of Earnings, EBITDA or Revenue
- Other Comparable Methods
- ‘Rule of Thumb’ Approaches
- Industry Examples
- Sources of Information/References
- Combination Approaches
- Valuation of High-tech Companies
- Weighted After-tax Cost of Capital (WACC) and EVA
- Case Study — Review of Valuation Issues
- Key Value Drivers in an Acquisition
- Quantification of Synergies and
- Justifications of the Acquisition Premium
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Valuation Methods
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- Methodolody
- Excel™ Large Screen In-class Illustration (CD template included)
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Financing & Deal Structure
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- Sources of Payment
- Cash vs. Debt vs. Equity vs. Other
- Valuation of Securities
- Deal Structure Issues for Publicly Traded Companies
- Valuing Options, Warrants and Convertibles
- Dilution Issues
- Case Study — Review of Deal Structure Issues
- Deal Structure Issues for Privately-held Companies
- Earnouts
- Seller Financing
- Private Company Case Study
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Effective Offers and Effective Negotiation
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- Owners Motivation: Public vs. Private and Strategies to Use
- Presenting the Offer
- Sample LOI and Purchase Contract
- Avoiding Typical "Deal Killers" - Real Life Case Studies
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CPE Credits
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This seminar is recommended for 16 hours of CPE, including 4 hours of Accounting and 12 hours of Specialized Knowledge & Applications.
The National Center for Continuing Education is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Visit the NASBA web site at www.nasba.org.
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Who Should Attend?
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This seminar is ideal for accounting and financial professionals who want a state-of-the-art understanding of M&A and business valuation techniques. This seminar is also appropriate for CEOs, business owners and corporate attorneys who have a basic background in finance and accounting. This seminar is perfect for: CFOs, Treasurers, Controllers, CPAs, financial and accounting Managers, staff accountants, financial and security analysts, Directors of Mergers and Acquisitions and their staff, investment bankers, consultants and corporate strategic planners. This seminar is also helpful for the attorney who works in an anti-trust or M&A environment.
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Seminar Prerequisites
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Please bring a financial calculator to the seminar.
This program requires that you have a basic understanding of financial statements. Course Level: Intermediate.
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Instructors
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In-house Presentations ...
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If you have a group of 12 or more employees who need to learn the critical elements for success, NCCE’s customized in-house training may be the cost-effective solution for your organization. Bring Mergers, Acquisitions and Business Valuation in-house and ensure that your staff understands the key drivers behind successful M&A activities.
Some of the organizations who have taken advantage of NCCE’s custom training include: Stanley Tools; US Small Business Administration; US Robotics; Aetna; Western Union and law firms such as: Jones, Day, Reavis & Pogue; Weil, Gotshal & Manges; Irell & Manella; and King and Spalding.
For more information or to schedule a custom in-house program, email NCCE at contact@nccetraining.com or telephone 800-635-9615.
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© Copyright 2006 Performance Seminars, Inc.
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