by the Amsterdam Institute of Finance and the CFA Institute,
this program is dedicated to the valuation, structuring, financing
- Evaluating and pricing
acquisitions: targets and synergies
- Identifying and screening
- Rigorous pre-merger analysis of
target -- and buyer
- Negotiating the terms
of the deal
- Managing post-acquisition
integration and divestitures
- Financing and structuring the
uses an analytical "corporate finance" framework and real-world
applications to introduce
principles and techniques of successful mergers and acquisitions. It addresses
questions including: Why do mergers that
looked great on paper fail in reality? How does one value companies
or being acquired? What is the best negotiation strategy? When is the
time to divest a business? How can a merger be funded in such
a way as to retain the merged entity's flexibility? When do leveraged
make sense, and how can they be financed?
One goal for participants is to develop a check list or
overview of the key criteria in an acquisition deal, to consider
a proposal, so as to grasp the main strengths and risks of the
strategic and financing alternatives after an initial analysis.
The program is of relevance to professionals involved in acquisitions who
need to know more about M&A strategy, valuation and
financing techniques. These include corporate finance officers,
commercial and investment
securities analysts; investment officers; corporate treasurers and
individuals whose professional future may be enhanced by an
of acquisition finance techniques.
will be provided with a package of
useful to the structuring and analysis of merger and LBO transactions,
pertinent articles and sample documentation from
transactions done in North America, Europe and elsewhere. The
include case studies of actual financings,
well as hands-on
exercises, and will give participants the opportunity to demonstrate
understanding of deals through group work and plenary discussions.
- How has the M&A world been altered by the global credit
- How can a company develop an acquisition strategy? How
should it be implemented?
should a target company be valued?
- How can one assess the potential gains from an acquisition
-- and the costs?
- What are the key features of screening and due diligence?
- Should the buyer pay in cash or in shares? What are the
other key elements to be negotiated before signing a
letter of intent?
- When should a company divest? What are the alternative ways
of divesting a business?
are the key terms and conditions, covenants and pricing, of different
sources of acquisition finance, including bank loans, mezzanine
finance and high
are the essential features of leveraged buyouts? How can one structure
the financing of an LBO, making it attractive to private equity and
other investors, without losing flexibility?
Strategy and the Economics of M&A
and Analysis of Acquisition Targets
M&A market and the effect of the credit crunch
that create shareholder value
five principles of corporate value:
acquisitions, financing, payback and risk management
vs shareholders’ vs lenders' interests: the agency problem
and acquisitions: when do they make sense?
- Mini-case studies: Wärtsilä NSD,
Drug, AOL-Time Warner
distinguishing features of successful and unsuccessful deals
evidence on which mergers add value, and which destroy value
an acquisition goes wrong
- Case study: The Acquisition of Allied
Colloids. Delegates will
follow the sequence of events in this cross-border
merger and develop a due diligence checklist.
four sources of acquisition value
your acquisition objectives
specific acquisition criteria
from long list to short
- Discussion: Acquisition Criteria for Akis
it the right target? Where is the value added?
analysis of the potential target
shareholders going to like the deal? Why or why not?
performance improvements embedded in the acquisition premium
does it take after doing the deal to make it all work?
are the target's value-drivers?
methods for acquisitions
and balance-sheet approaches
value and EBITDA
- Case study: Active Generation. Delegates value a private company for
acquisition, using both comparables
and cash flow methods and incorporating the results of potential
option valuation: buying opportunities despite negative cash flows
and turnaround situations
- Application: DeCode Genetics.
Delegates are challenged to identify the upside opportunity in this
Icelandic biotechnology company.
Screening and Analysis
Tools of Valuation
Colloids: Episode 1
Colloids: Episode 2
of M&A Terms
of Mergers and Acquisitions
a Company’s Cost of Capital
of Valuing a Business
the Merger's Terms
The sources of acquisition value-added
study: The SBC-AT&T Merger. Delegates seek to isolate the
potential synergies in a merger of two mature telecoms companies.
the combined company
- Case study: MTC-Celtel. Delegates
value the synergies resulting from a potential acquisition, adjusting
for risk and cost-of-capital
effects and employing sensitivity analysis on the hoped-for synergy
- Role of investment bankers and other
- Developing a negotiating stance
- Understanding sellers' goals and
- Dealing with defensive strategies: poison
pills and other devices
- Mini case study: Goldfield's Anti-Takeover
- Dealing with rival bidders
- Dealing with private owners
- Structuring the deal: How much should we
pay? How should we pay?
- The proposed basic Term Sheet
- Keep the romance alive during due
diligence and while you secure financing
- Closing the deal
- Case study: Lifetime-AGI. Delegates engage in a hands-on negotiating
valuation, setting the price and payment terms of the merger, and
due diligence checklist
due diligence can reveal – and what it cannot
diligence goes wrong
due diligence to the company and industry
- Case study: New York Magazine. What are the key aspects of due diligence
in the publishing world?.
- Major factors determining success of
- Checklist of areas of risk
- Compensation and motivation issues
- Setting milestones
- Case studies: Penn State and Geisinger, Lacsa and Taca. Delegates discuss pitfalls and alternative
approaches to post-merger
integration success. They prepare an action plan for the effective
of two companies.
& Johnson vs Guidant
Time: Acquisition of AGI
Articles and Documents
Letter of Intent
of a Merger Failure
Finance and Buyouts
- Post-acquisition divestitures
- Measuring and managing break-up value
- Taxable and tax-free corporate breakups
- Before-and-after divestiture analysis
- Case study:
learn how to perform a
before-and-after divestiture valuation
Summary and Conclusions
- The different approaches of financial vs
- Capital structure considerations
- Case study: Photronics. Delegates evaluate alternative
financing techniques in the
context of this Asian acquisition situation.
- Senior secured bank financing - terms and
- The cost of revolvers. term loans and
- Sources of acquisition debt finance - no
longer just the banks
- Asset-based finance, including
study: Madras Appliances: Financing
the acquisition of an an Indian retail company
- Mezzanine finance, including
second-lien, PIKs and warrant loans
- Subordinated seller notes and earn-outs
- Example of spreadsheet-based debt capacity
analysis for leveraged finance
- Focus: synthetic ratings and debt pricing
study: Acquiring Plato Data. We plan the financing of a
management-led leveraged acquisition.
- Focus: mezzanine and private equity finance
in LBOs: “The VC Method”
- Paydown and exit analysis
study: Flexics ME.
Delegates employ the tools and ideas of the course to a competitive
situation featuring a UAE-based leveraged buyout and sale to a
They negotiate key features, including:
- Valuation of the target
- Synergies assessment
- Raising the funding
- Terms of payment
the Madras Acquisition
Selling the Company
A Note on LBOs
Mezzanine Debt 1
Applied Mergers and
Acquisitions (Robert Bruner)
Mergers, Acquisitions and
Corporate Restructuring (Donald dePamphilis)
on Valuation (Aswath Damodaran)
for Acquisitions, Buyouts and Restructuring (Enrique Arzac)
Giddy has taught finance at NYU, Columbia, Wharton, Chicago and
in over 45 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 the
U.S. and abroad. As a banker and consultant he has been involved in the
growth of the capital markets in the USA, Europe and Asia. He is the
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.