What is Advanced Corporate
Finance?
Advanced
Corporate Finance involves the application of analytical methods,
restructuring techniques and financing instruments to increase the
value of a company.
For more resources see
the
instructor's website, giddy.org. |
.
Who Should Attend?
The seminar is of relevance to both corporations and financial service professionals: corporate finance officers,
commercial and investment
bankers,
securities analysts; investment officers; corporate treasurers and
other
individuals whose professional future may be enhanced by an
understanding
of advanced corporate finance techniques.
Materials
Participants will be provided with a package of
materials
useful to the structuring and analysis of corporate financing
and restructuring techniques, including
pertinent articles, rating agency reports and sample spreadsheets from
actual deals done in Europe and elsewhere.
Instructors
Ian
Giddy has taught finance at NYU, Columbia, Wharton, Chicago and
in
30+ countries abroad for the past two decades. 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, he has
served
at the International Monetary Fund and the U.S. Treasury and has been a
consultant with numerous corporations and financial institutions in the
U.S. and abroad. As a banker and consultant he has been involved in the
growth of the ABS market in the USA, Europe and Asia. 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.
|
Advanced Corporate Finance is the
use of new instruments, effective analytical techniques and financial restructuring to increase the value of a company.
The
Workshop
This workshop will be taught
around
five major topics employing in-depth group work on case studies,
financial analysis and
deal structuring. The focus will be on identifying situations that call
for
nonstandard corporate finance solutions, the valuation of businesses, and the design and pricing of
the appropriate financing instruments. Examples of such situations
include debt restructuring, recapitalizations, IPOs, private
equity
and management buyouts, divestitures and acquisitions.
We review the key
decisions
- investment, financing and risk management - that contribute to
shareholder
value. Running through the key computations and numbers of corporate
finance,
we discover the assumptions behind common models and ratios used in
valuation
of a company, in mergers and and other forms of corporate financial restructuring. We apply this to
several case studies, revealing also
how an acquisition, divestiture or restructuring can alter the value of a
company -- for better or
for
worse.
One goal for participants is to develop a check list or rapid
overview of the key criteria in a structured finance deal, to consider
when analysing
a proposal, so as to grasp the main strengths and risks of each
structure after an initial rapid analysis.
The workshop will include case studies of actual coporations and their financings,
as
well as hands-on
exercises, and will give participants the opportunity to demonstrate
their
understanding of deals through presentations and discussions.
Some Benefits of the Course
What can delegates expect to gain from this course?
- Learn
or update fundamental corporate finance skillsIdentify the key value
drivers as well as the vulnerabilities of a business Master methods to
calculate the cost of capital
- Apply corporate valuation models, including asset-based, comparables and cash flow methods
- Improve any company's value by reassessing the optimal capital structure
- Measure and manage financial risks using derivatives and financing techniques
- Understand the use of credit derivatives to manage credit risk
- Apply advanced financing techniques, including securitization, leveraged and mezzanine finance
- Be able to identify appropriate valuation techniques for unusual
situations such as distress, synergistic mergers, and going private
- Apply the principles of corporate finance in both developing and
developed markets
Outline
of Workshop
| Date |
Topics |
Resources
|
| Day 1 |
The Job of the CFO
- Why finance matters -- and why most companies are undervalued
- The 5 principles of corporate finance
- The corporate value drivers, and how to change them
- Measuring value: implementing the free cash flow approach
- Valuing a company at the equity level versus whole-firm value
- How business risk combined with financial risk influences investors' return expectations
- Leverage: the good, the bad and the ugly
- Case study: Autolinks.
Delegates evaluate the business and financial risk of this Finnish
private company, and how it impacts the company's financing.
Value Creation Through Corporate Financing
Decisions
- Methods of Effective Cost Analysis: how to measure the cost of debt, cost of equity, and weighted-average cost of capital
- Adjusting the costs of debt and equity for leverage
- Synthetic ratings and debt pricing
- Corporate
taxation and capital structure
- Finding the optimal capital structure: debt, equity or mezzanine?
- Case
study: Oracle.
Delegates compute the effective cost of capital for a company with
various degrees of leverage, and consider how leverage fits in with the
company's business and financial strategy.
- Using debt and derivatives to manage financial risks
- Structured finance techniques: when it makes sense to use them
- Case study: A Day in the Life. Delegates compare the techniques and effective cost of various structured bond issues.
|
Articles
Warren's World
Notes on cost of capital
and capital
structure .
Spreadsheets
beta.xls
Industry
betas
wacc.xls
SAP
Oracle solution
|
| Day 2 |
Valuing the Business
- Valuation as a tool to discover value-drivers and restructuring opportunities
- Asset-based valuation
- Using comparables
- Discounted cash flow analysis
- Case study: Active Generation. The 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?
Applying Valuation Methods to Mergers, Acquisitions and Divestitures
- Corporate M&A strategy: how to win, how to lose
- Sources of value gains from acquisitions
- Restructuring checklist
- Total cost computation
- Identification and valuation of operational synergies
- Identification and valuation of control gains
- Case study: Optika. A
spreadsheet-based analysis of the stand-alone and merged value of two
German optical companies helps to show how a constant-growth model can
help focus on the drivers of the company's value.
- Case study: MTC-Celtel. Merger synergy analysis.
- Break-up valuation
- Case study: Pinault-Printemps-Redoute Delegates learn how to perform a before-and-after divestiture analysis
|
Articles
Methods of Corporate Valuation
Spreadsheets
Valuation-related
spreadsheets
Active Generation spreadsheet
Optika.xls
breakup.xls
Celtel solution
|
| Day 3 |
Corporate Financial Restructuring
- What is corporate financial restructuring?
- Applying the value drivers to corporate restructuring
- Organizational vs financial restructuring
- Leveraged build-ups and leveraged recapitalization
- Case study: Truck Toys.
Delegates consider the method of debt restructuring proposed by this
company, from the point of view of outside shareholders as well as
managment.
- Financial distress, bankruptcy
and reorganization
- Debt-for-equity swaps and other forms of distress-driven financial restructuring
- Case study: Deaths-R-Us. This
company is suffering the burden of excessive debt. Delegates work out
how banks, shareholders and management can restructure the debt so as
to restore the company to financial health.
IPOs and LBOs
|
Articles
Corporate Financial Restructuring
Spreadsheets
Debt restructuring
Truck Toys
lbocapacity.xls
Plato Data spreadsheet
Deaths-R-Us
Corporate Finance and Debt
Capacity Tables
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