Mergers and Acquisitions has become part of the corporate financing world. Every day, Wall Street investment bankers arrange M&A transactions, which bring separate companies together to form larger ones. When they're not creating big companies from smaller ones, corporate finance deals do the reverse and break up companies through spinoffs, carve-outs or tracking stocks. Not surprisingly, these actions often make the news. Deals can be worth hundreds of millions, or even billions, of dollars. They can dictate the fortunes of the companies involved for years to come. For a CEO, leading an M&A can represent the highlight of a whole career. And it is no wonder we hear about so many of these transactions; they happen all the time. Next time you flip open the newspaper's business section, odds are good that at least one headline will announce some kind of M&A transaction.
During this downturn of global economy, a strategic merger or acquisition is particularly becoming more important. As the credit crunch threatens to become a global downturn, corporate leaders have a choice: pull in their horns and ride out the storm or look for opportunities to pick up bargain-basement assets that will help them grow and create future value for shareholders.
Project Scenario
The project will provide an overview of Merger and Acquisition, valuation methods, insight on deal design, how to finance the M&A deal, considerations of capital structure such as debt and equity, in addition to terms of exchange.
Deliverables
• Provide an introduction to Mergers and Acquisitions and discuss the significance in today's downturn economy in addition to the effects in the financial market.
• Complete a SWOTT analysis of Mergers and acquisitions
• Discuss different valuation methods used in M&A such as discounted cash flow, book value, liquidation value, replacement costs, market value, etc.
• Provide an analysis on capital structure considerations of equity versus debt.
• Discuss some potential synergies for successful mergers or acquisitions and what to look for.
• Provide a preview on how a deal is done, why some succeed, why some fail, and provide some examples of both.
• Discuss some restructuring methods such as sell offs, Equity carve outs, and spin offs
• Give an example of how a deal could be financed such as cash, stocks, or both. Which is ideal and/or most common?