Why
a "Strategic Corporate Valuation" Approach?
Strategic corporate valuation involves the
application of analytical methods of
valuation to help determine the company's business and financial
strategy. The goal is to increase the value of the business through
M&A,
restructuring techniques and leveraged financing instruments. |
The
Workshop
This course offers an in-depth
study of the strategic applications
of corporate valuation techniques with a special emphasis on
leveraged finance and extracting cash value through financial
restructuring.
Starting with the company's "value drivers," we introduce the key
decisions
- investment, financing and risk management - that contribute to
shareholder
value. Running through the computations of corporate
valuation and financing,
we discover the sources of value creation in acquisitions. We apply
this to
several case studies, revealing also
how leverage, divestitures or acquisitions can alter the value of a
company.
The workshop will
include case studies of actual corporations and how valuation methods
influence their strategy,
as
well as hands-on
exercises, and will give participants the opportunity to demonstrate
their
understanding of techniques through presentations and
discussions. Participants
will be provided with a package of
materials
useful for corporate valuation, including
pertinent articles, and sample spreadsheets from
actual deals done and case studies.
Pre-Course
Preparation
Participants should read
the articles listed, and review all the course materials in advance.
The will be no time available during the workshop for background
reading.
Outline
of Workshop
Date
|
Topics
|
Resources
|
| Day One |
Valuing
a Business
- Valuation
methods as corporate decision-making tools
- The 5 principles of corporate finance
- The corporate value drivers, and how
to change them
- Valuation as a tool to discover
restructuring opportunities
- Review of valuation methods
- Asset-based
valuation
- Using
comparables -- and when they make no sense
- Enterprise
value and EBITDA
- Discounted
cash flow analysis
- Example: Valuing Actavis using the
DCF method
- Measuring
the weighted-average cost of capital
- Case study: Active
Generation. The Lebanese owner of a
private fitness-center network aims to sell
to a strategic buyer, but wants to get the best price. What method
should he use to value the business?
- Valuing
a private company and raising private equity
- Valuation
for a start-up business
- Valuing
a business in a developing country
- Case study: Garden State Paper.
Can you assess the valuation for this Central American company to help
it raise private equity financing?
Applying
Valuation Methods to
Mergers, Acquisitions and Divestitures
- Corporate M&A strategy: how to
win, how to lose
- Sources of value gains from
acquisitions
- Example:
Orascom Construction. Should this Middle Eastern company expand
through acquisitions of local cement companies?
- Restructuring checklist
- Identification and valuation of
operational synergies
- Identification and valuation of
control gains
- Case study: MTC-Celtel. Before-and
after merger synergy analysis for the acquisition of an African mobile
phone network.
- Where
pure financial restructuring can add value
- Case study: The Goldfield Company. What is this company
worth? How would you finance an acquisition? What would you change?
Valuation
for Financial Buyers
- Implementing a sponsor buyout:
senior, mezzanine
and equity finance
- Debt capacity and exit analysis
- The "VC Method" of valuation
- Focus: synthetic ratings and debt
pricing
- How to structure and price the
leverage for an acquisition or buyout
- Case study: Nukem. A
private equity perspective on the buyout value of the security services
division of a nuclear power company.
|
Presentations
Valuing
a Business
Valuation
Methods and M&A
Case Studies
Actavis
Free Cash Flows
Valuing
Actavis
Active
Generation
Garden
State Paper
MTC-Celtel
Goldfield
Nukem
Spreadsheets
P/E
Ratios
Industry
ratios
Cost
of capital
beta.xls
IBMvaluation
Valuation-related
spreadsheets
actavis_valuation.xls
active_generation.xls
Active
Generation solution
mtc-celtel_case.xls
celtelsolution.xls
lbocapacity2.xls
Articles
Methods
of Valuing a Business
EBITDA
and Valuation
|
Day
Two |
Leveraged
Acquisition Finance
- Debt capacity analysis
for private companies
- Case
study: Ubuntu Properties.
A private company is looking for a means of financing an expansion in
South Africa. Participants estimate the company's debt capacity and the
owner's
financing options.
- Post-acquisition leveraged re-finance
- Paydown
and exit analysis
- Case Study: Reykjavik Fleet Leasing.
An exercise in exit analysis.
- Exit
and ownership transition
Mezzanine Financing Techniques
- Mezzanine finance -- what does it
mean?
- Checklist of senior and subordinated
financing techniques
- Senior secured debt in emerging
markets -- what does it mean?
- Sale-and-leaseback financing
- Collateralized loans versus
securitized finance
- Second lien and senior-sub
mezzanine
- Case
study: Second Lien Facility. How would you adapt this term sheet
to your client's needs?
- Mezzanine: Step-up rates, PIKs,
participations,
warrants, preferred
- Application:
Sealy PIK. What is the effective cost of this PIK note?
- The structure and pricing of sub debt
and warrants
- Example:
Woodstream's
Mezzanine. What is the effective cost to the issuer of this
mezzanine debt issue?
- Negotiating a mezzanine termsheet
- Case
study: Cognis Refinancing. The post-LBO refinancing of this
german chemicals company illustrates the legal relationship among debt
sources.
- Performance-linked participation
debt: an alternative form of mezzanine
- Mezzanine as a catalyst in private
emerging market finance
- Case
study: Suriname Hydro Company. What are the advantages and
disadvantages of the Contingent Payment notes in this deal? What are
the
exit possibilities?
- Convertible notes and redeemable
preferred stock
Acquisition, Financing
and Exit
- Private equity entry and exit
strategies
- Case
study: Flexics ME. The controlling owner of
this Dubai-based plasma
technology
company is seeking a means of realizing its corporate value. What is Flexics ME worth
as an acquisition target to Photronics, and
how
much of a premium should be paid? What is it
worth in the IPO market, and could it be worth more to LBO investors?
- Summary of workshop
|
Presentations
Leveraged
Finance
Mezzanine
Finance
Case Studies
Ubuntu
Properties
Reykjavik
Fleet Leasing
Second Lien termsheet
Sealy
PIK
Woodstream
Woodstream
termsheet
Cognis
Refinancing
Suriname
Hydropower
Flexics
ME
Spreadsheets
ubuntu_data.xls
ubuntu.xls
woodstream.xls
financing_abc.xls
flexics
data.xls
flexis_me.xls
Articles
A Note on LBOs
Second Lien
Loans
Mezzanine Finance 1
Mezzanine Finance 2
|
About the Instructor
Ian Giddy is a
professor of finance at New York University, USA. He has taught
finance at NYU, Columbia,
Wharton, Chicago and abroad for the past thirty years. He was
Director
of International Fixed Income Research at Drexel Burnham Lambert from
1986
to 1989. The author of more than fifty articles on international
finance,
Dr Giddy has served at the International Monetary Fund and the U.S.
Treasury
and has been a consultant with numerous financial institutions and
corporations
in Europe, North America, the Middle East and Asia. He has lectured in
more than forty countries, and has been involved in corporate finance
for over 15 years. He is the author or co-author of
The
International
Money Market, The Handbook of International Finance, Cases
in International Finance, Global Financial Markets, Asset
Securitization in Asia, and The
Hudson River Watertrail Guide. He and his wife are the founders of
Cloudbridge, a nature reserve in Costa Rica.
|
