What is Acquisition Finance?
Acquisition Finance is the
use of debt, equity and hybrid financing techniques to achieve an
acquisition or leveraged buy-out in a cost-effective manner.
will be on identifying the financing solutions that match the company's
cash-flow based value and are adapted to the client situation
-- and this may call
nonstandard corporate finance techniques and funding sources.
This two-day interactive
course offers a practical study of the techniques of valuing and
financing acquisitions with a special emphasis on leveraged
acquisitions abroad by Icelandic companies.
workshop includes case studies of actual acquisition financings and
how the target companies can be valued. It will show how a variety of
techniques, including senior secured leveraged loans, vendor finance,
second lien and mezzanine debt can serve as a
catalyst to help an acquisition get accomplished. We'll use
lecture-discussions, spreadsheet analysis, deal memorandums and
exercises. These will give bank professionals the opportunity to
understanding of techniques that can be employed in advising clients
and funding their acquisitions.
Features of the Course
should a target company be valued? How does the method of valuation
affect the availability of funds from banks, institutional investors
and private equity investors?
- How can one assess the potential gains from an acquisition?
How dependable are these projections, from an investor's viewpoint?
are the key terms and conditions, covenants and pricing, of different
sources of acquisition finance, including subordinated notes and high
- What senior,
subordinated and mezzanine and equity financing techniques are
a particular acquisition situation?
- How can one assess the best financing mix
in each acquisition?
- What should one look for in a cash flow
analysis to model the
acquisition finance, including the repayment of senior, mezzanine and
participants will be provided with a package of
useful for developing acquisition financing proposals, including
pertinent articles, case studies based on
actual deals, and sample
|| Corporate Valuation for Acquisitions
- The keys to M&A finance:
Valuation of the target, valuation of the synergies, assessment of debt
- The gains from acquisitions:
Operational and control synergies
- How much is the target worth? How
should we pay?
- A review of valuation tools for
cash flow analysis
- Enterprise Value and free cash flows
Actavis Free Cash Flows
- Weighted-average cost of capital
- Case study: Valuing Actavis using
comparables and the DCF method
a financial institution
- Sponsor vs trade acquisitions:
comparing valuation analysis
a private company and raising private equity
by financial sponsors
- Corporate M&A strategy: how to
win, how to lose
- Restructuring checklist
the business post-acquisition
- Case study: MTC-Celtel. Merger
Acquisition Financing Techniques
- Checklist of senior and subordinated
- Acquisition bridge finance and senior
study: A Bridge Too Dear. How should the bridge loan be priced?
And the senior debt?
- Capital market refinancing: ISS bonds
- Asset-based finance and
securitization including WBS
study: Financing the BAA Acquisition. What would you recommend
- Sale-and-leaseback financing
- Second lien versus senior-sub
study: Second Lien Facility. How would you adapt this term sheet
to your client's needs?
- Financing with a bond placement
- Private versus public markets (and
- Terms and pricing of high-yield bond
Please consider the appropriate terms and
conditions of this high-yield financing.
- Mezzanine: Step-up rates, PIKs,
participations, warrants, preferred
- The structure and pricing of sub debt
study: Woodstream's Mezzanine.
What is the effective cost to the issuer of this mezzanine debt issue?
- Terms and conditions of a mezzanine
study: The Woodstream Termsheet. Examine this termsheet. Which
features would you, as investor, insist on? Where would you be willing
to give way?
- Performance-linked participation
debt: an alternative form of mezzanine
Bridge Too Dear
the BAA Acquisition
Capacity Analysis and Leverage Tiering
- Debt capacity: what is debt? How much
can a company support?
- Asset-based lending
Madras Appliances. Based on the assets, how much debt can this
- Debt capacity and cost of capital
for acquisitions by private companies
study: Ubuntu Properties.
A private company is looking for a means of financing an acquisition
for expansion. Participants estimate the company's debt capacity and
- Debt capacity analysis
- Focus: synthetic ratings and debt
- How to structure and price the
leverage for an acquisition or buyout
- Post-acquisition leveraged re-finance
study: Financing ISS. Teams work to model the debt financing for a
buyout of a Danish cleaning services company
and exit analysis
- Case study: Reykjavik Fleet Leasing.
What value should we place on this company at exit?
- Using a model to simulate the cash
- Designing the senior, mezzanine and
- Evaluating an acquisition funding
proposal with mezzanine debt
study: Albanian Bridge Company. Can you model the rate of
return on the senior and mezzanine funding for this privatization
Structuring an Acquisition: Valuation and Funding
- Valuation for M&A: financial
versus strategic viewpoint ("Is every acquisition financial?")
- Valuing a division within a company
- Divestitures in acquisitions
John Deere. Would this company be better off divesting its
- Evaluating funding possibilities
- Structuring the funding: borrow on
study: RFL Malaysia. What structure should the buyer use for
- Terms and pricing of the senior and
- Required return on private equity
- Case study: Financing
the Madras Acquisition.
The controlling owners of this retail company need to sell the company.
What is it worth? How
could a buyout,
or an acquisition, be financed?
- Summary and Recap
of Corporate Valuation
of Valuation Methods
on cost of
on Leveraged Buyouts
notes term sheet
Finance and Debt
(US and global companies)
advfn.com (corporate financial ratios)
Moodys, S&P, Fitch (ratings)
About the Instructor
born in South Africa, has taught finance at NYU, Columbia, Wharton,
in over 40 countries worldwide for the past three decades. He was
Fixed Income Research at Drexel Burnham Lambert from 1986 to 1989. The
author of more than fifty articles on international finance, he has
at the International Monetary Fund and the U.S. Treasury and has been a
consultant with numerous corporations and financial institutions in
North and South America, Europe, Asia, the Middle East and Africa. As a
banker and consultant he has been involved in the
growth of the structured finance 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
River Watertrail Guide. He and his wife are
the founders of Cloudbridge, a nature reserve in Costa Rica.
About Reykjavik Savings Bank
Reykjavik Savings Bank ("SPRON") is
an Icelandic bank offering integrated
financial services to companies, investors and
individuals. The bank's main purpose it to serve as a trustworthy,
institution which fulfills the needs of its customers and actively
participates in social and economic development in the greater
Reykjavik area. For further detail, see www.spron.is.