Applied Mergers and Acquisitions

Author:: Robert F. Bruner
Format:: Hardcover

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Short description

Addresses the key factors of M&A success and failure. Readers will learn the art and science of M&A valuation, deal negotiation and bargaining, and a framework for considering trade-offs in an effort to optimize the value of any M&A deal.

Long description

Despite the material failure rates of mergers and acquisitions, those pulling the trigger on key strategic decisions can make them work if they spend great care and rigour in the development of their merger and acquisition (M&A) deals. Applied Mergers and Acquisitions addresses the key factors of M&A success and failure. Readers will learn the art and science of M&A valuation, deal negotiation and bargaining, and a framework for considering trade-offs in an effort to optimize the value of any M&A deal.

Product details

Contributor:: Joseph R. Perella
Publisher:: John Wiley & Sons Inc
ISBN:: 9780471395065
Publication date:: April 2004
Additional format:: Contains Hardback and CD-ROM
Length:: 262mm
Width:: 187mm
Thickness:: 55mm
Weight:: 2010g
Edition:: New title
Pages:: 1056
Illustrations:: illustrations
Readership:: Tertiary education; Professional & scholarly

Foreword. Preface. PART ONE: INTRODUCTION AND KEY THEMES. CHAPTER 1: Introduction and Executive Summary aACAACAuHow Can My Team Do Better Than the Averages?aACAACAu A Framework for M&A Success. Seven New Big Ideas Worthy of the Best Practitioners. CHAPTER 2: Ethics in M&A Why Should One Care? In Whose Interests? What Is Good?aACAACA Consequences, Duties, Virtues. Promoting Ethical Behavior. Greenmail Case: Walt Disney, 1984. CHAPTER 3: Does M&A Pay? The Measurement of M&A Profitability: Better Than What? Findings Based on the Analysis of Returns to Shareholders. Findings Based on the Analysis of Reported Financial Performance. Findings about the Drivers of Profitability. Findings from Surveys of Executives. Findings from Clinical Studies. PART TWO: STRATEGY AND THE ORIGINATION OF TRANSACTION PROPOSALS.AAC CHAPTER 4: M&A Activity M&A Activity Appears in Waves. Explanations of M&A Activity. aACAACAuCreative DestructionaACAACAu as the Driver of M&A Activity. The Many Forms of Economic Turbulence, and Where to Look for It. Turbulence Drives M&A Activities and Opportunities. CHAPTER 5: Cross-Border M&A Cross-Border M&A Activity. M&A within Regions and Trading Blocs. Drivers of and Returns from Cross-Border M&A. Strategic Analysis of Countries: Getting a aACAACAuView.aACAACAu CHAPTER 6: Strategy and the Uses of M&A to Grow or Restructure the Firm Setting Strategy. Expansion by Inorganic Growth. Restructuring, Redeployment, and Sale. Choosing a Path. Does It Pay to Diversify or Focus the Firm? CHAPTER 7: Acquisition Search and Deal Origination: Some Guiding Principles Eight Principles of Acquisition Search. Case Study: Kestrel Ventures LLC. PART THREE: DILLGENCE, VALUATION, AND ACCOUNTING. CHAPTER 8: Due Diligence The Concept of Due Diligence. Principles and Strategies. Timing, Team, and Outputs. The TargetaACAACA's View: The Data Room and Its Pressures. Focus on Knowledge. Excellence in Due Diligence. CHAPTER 9: Valuing Firms Rule #1: Think Like an Investor. Rule #2: Intrinsic Value Is Unobservable
We Can Only Estimate It. Rule #3: An Opportunity to Create Value Exists Where Price and Intrinsic Value Differ. Rule #4: So Many Estimators, So Little TimeaACAACA It Helps to aACAACAuHave a View.aACAACAu Rule #5: Exercise Estimators of Intrinsic Value to Find Key Value Drivers and Bets. Rule #6: Think Critically
Triangulate Carefully. Rule #7: Focus on Process, Not Product. Rule #8: When in Doubt, see Rule #1. Valuation Case: Chrysler Corporation, March 1998. CHAPTER 10: Valuing Options Option Basics. Option Theory. Option Applications. A Practical Guide to Financial Option Valuation, with Some Important Caveats. CHAPTER 11: Valuing Synergies The Concept of Synergy. Synergy Estimates Must Be a Central Focus of M&A Analysis. A Framework for Synergy Analysis. Estimating Synergy Value, with Examples. Synergies in the Daimler/Chrysler Merger. Rules of Thumb. CHAPTER 12: Valuing the Firm across Borders How Borders Affect M&A Valuation. Strategy for DCF Approach: Home versus Foreign Valuation. Adjusting Cash Flows. Estimating the Discount Rate. Recapitulation: Valuation Process with Adjusted CAPM. Valuation Cases across Borders. CHAPTER 13: Valuing the Highly Levered Firm, Assessing the Highly Levered Transaction The World of Highly Levered Firms. The Effect of Leverage on Firm Value. The aACAACAuWhole DealaACAACAu Approach. A Case in Leveraged Recapitalization: Koppers Company. LBO Case: MediMedia International, Ltd. LBO Case #2: Revco Drug Stores. CHAPTER 14: Real Options and Their Impact on M&A Types of Real Options. Where Real Options Appear in M&A. Why Not Value Everything as an Option? How to Assess the Impact of Real Options. Four Mini-Cases in the Analysis of Real Options. CHAPTER 15: Valuing Liquidity and Control Adjusting Values for Discounts and Premiums. Where Do Illiquidity Discounts Come From? Where Do Control Premiums Come From? Interaction of Liquidity and Control. Case Study: Volvo/Renault, 1993. CHAPTER 16: Financial Accounting for Mergers and Acquisitions Overview of Purchase Accounting. How to Interpret Reported Financial Results from a Business Combination. Linkage among Accounting Choices, Form of Payment, Financing, and Price. Dangers of Earnings Management. CHAPTER 17: Momentum Acquisition Strategies: An Illustration of Why Value Creation Is the Best Financial Criterion Four Cautionary Tales. Momentum Acquisition Strategies. The Arguments for and against Momentum Acquiring. Value Creation Is the Best Criterion for Evaluating Acquisition Strategies. Momentum versus Value Strategies. PART FOUR: DESIGN OF DETAILED TRANSACTION TERMS. CHAPTER 18: An Introduction to Deal Design in M & A. Deal Structures Are Solutions to Economic Problems. Possible Desirables in Designing a Deal. Design Leads to Results. Each Deal Is a System: The aACAACAuWhole DealaACAACAu Perspective. Some Implications for the Deal Designer. CHAPTER 19: Choosing the Form of Acquisitive Reorganization Five Key Concerns for the Deal Designer. Deals That Are Immediately Taxable to the Selling Shareholders. Deals That Defer Tax to the Selling Shareholders. CHAPTER 20: Choosing the Form of Payment and Financing Patterns and Trends in Form of Payment. Does Form of Payment Matter? Considerations in Selecting the Form of Payment. Assessing the Financing Aspects of a Deal. CHAPTER 21: Framework for Structuring the Terms of Exchange: Finding the aACAACAuWin-WinaACAACAu Deal A Model for Critically Assessing Exchange Ratios. Uses and Illustration of the Model. Extension to Cash-for-Stock Deals. Choosing Exchange Ratio Targets in the aACAACAuWin-WinaACAACAu Zone. CHAPTER 22: Structuring and Valuing Contingent Payments in M&A Contingent Payments in M&A. Earnouts Can Be Useful
But If So, Why ArenaACAACA't They Ubiquitous? Earnouts Are Options on Future Performance. Structuring an Earnout. Tax and Accounting Considerations. A Generic Approach to Valuing Earnout Instruments. The Eli Lilly Case. Proposing and Negotiating an Earnout and Other Contingent Payments. CHAPTER 23: Risk Management in M&A Value at Risk When a Deal Fails. Transaction Risk: Types and Sources. Types of Risk Management. Collars and Their Analysis. Contingent Value Rights Case. Staged Acquiring Case. Where and When to Manage Risk. CHAPTER 24: Social Issues The Importance of Social Issues in M&A. Survey of Social Issues. Impact of Social Issues on Attractiveness of the Deal. Case Studies in the Role of Social Issues. PART FIVE: RULES OF THE ROAD: GOVERNANCE, LAWS, AND REGULATIONS. CHAPTER 25: How a Negotiated Deal Takes Place The Deal Shaping Process. Risks: How the Process Can Get Derailed. Transaction Planning and Preparation. Initiating Discussions. First-Round Documents. The Definitive Agreement. Disclosures to Investors and Regulators. Gaining Approval. Case Study: Daimler-Benz and Chrysler. CHAPTER 26: Governance in M&A: The Board of Directors and Shareholder Voting Governing Well Is Hard to Do. Good Governance Pays. How Shareholders Rule. Fiduciary Duties of Target Directors in Considering M&A. Preparing for the BoardaACAACA's Review of a Deal. How Can Firms Be Governed Better? CHAPTER 27: Rules of the Road: Securities Law, Issuance Process, Disclosure, and Insider Trading Overview of Key Securities Laws and Rules. International Law Comparison. Disclosures. Insider Trading. Observance of Deal Process. CHAPTER 28: Rules of the Road: Antitrust Law Antitrust Law: History and Motives. How Antitrust Regulators and Laws Affect M&A. U.S. Antitrust Merger Guidelines. Premerger Review Process in the United States. Antitrust Regulation of M&A in the European Union. Critical Perspectives on Antitrust Policy. CHAPTER 29: Documenting the M&A Deal First-Round Documents. Definitive Agreement. Merger Proxy Statement and Prospectus. PART SIX: COMPETITION, HOSTILITY, AND BEHAVIORAL EFFECTS IN M&A. CHAPTER 30: Negotiating the Deal The Relevance of Negotiation Process. Behavioral Finance. Influencing Bargai