- resources in finance

Amsterdam Institute of Finance/CFA Institute

Advanced Corporate Valuation
Professor Ian Giddy

About the Program
The Advanced Corporate Valuation program offers an in-depth study of the analytic techniques of corporate valuation with a special emphasis on the sources of value creation in mergers and acquisitions. We introduce the key decisions - investment, financing and risk management - that contribute to shareholder value. Running through the computations of corporate valuation, we discover the assumptions behind common models and ratios. We apply this to several case studies, revealing stand-alone value and also how an acquisition or other restructuring can alter the value of a company. We also demonstrate the alternative view of a company's value -- based on the private equity view of a firm, how an analysis of the financing, paydown and exit projections can reveal the price an investor would be willing to pay for a company.

Program Content
This three-day course covers the three crucial aspects of corporate valuation. On the first day, we learn the techniques used by professionals to value a business: the assets' value; how comparable comanies are valued; and the cash-flow based methods. The second day takes us beyond standard methods, applying valuation princiles to special situations such as mergers and acquisitions, private companies, firms undergoing restructuring, and natural resource companies. On the final day, we focus on valuation in the context of divestitures and leveraged buyouts.

Prof. Ian Giddy is a graduate of the University of Michigan (MBA 1972, PhD 1974) and the University of the Witwatersrand (BSc 1970). He has taught finance at NYU, Columbia, Wharton, Chicago and abroad, in over forty-five countries, for the past thirty years. He was Director of International Fixed Income Research at Drexel Burnham Lambert from 1986 to 1989. He is the author or co-author of numerous articles and books, including The Handbook of International Finance, The International Money Market, Cases in International Finance, Global Financial Markets, Asset Securitization in Asia and The Hudson River Watertrail Guide.

Who Should Attend?
The seminar is of relevance to corporate finance professionals and investors in acquisition-related investments, and to the bankers who serve them. These include 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 corporate valuation techniques.

Key Benefits
Learn how a company should be valued -- on its own, and in the context of an acquisition or buyout.
Discover that the method of valuation affects the availability of funds from banks, institutional investors and private equity investors.
Assess the potential gains from an acquisition, and the sources of post acquisition or buyout value creation.

Method and Schedule
The lectures will offer structure, the discussions will amplify, and the case studies will apply tools and concepts to real-world applications.

Background Reading
Methods of Corporate Valuation
Critique of Valuation Methods
Private Equity Valuation Guidelines
A Company in One Page
The Fool's Method
Warren's World

Course Outline

Corporate Valuation Masterclass

Day Topics  Resources
Day 1

Valuation Techniques
Why valuation matters -- and why most companies are undervalued
The 5 principles of corporate finance
Valuation as a tool to discover restructuring opportunities
Valuation as a tool to discover value-drivers and restructuring opportunities
Asset-based valuation
Using comparables
Discounted cash flow methods
Cost-of-capital issues
How business risk combined with financial risk influences investors' return expectations

Case Studies


Day 2

Valuation Applications
Incorporating growth models into the value
Valuation in the context of an acquisition
Restructuring checklist
Total cost computation
Identification and valuation of operational synergies
Identification and valuation of control gains
Valuing a private company
Valuation in emerging markets
The method of "option-based valuation" for a strategic investment


Case Studies


Day 3

Valuation: Special Situations
Financial restructuring: impact on corporate value
Break-up method of valuing a company
When should a company divest a business?
Valuation for financial buyers
Implementing a sponsor buyout: senior, mezzanine and equity finance
Debt capacity and exit analysis
Case study: Reykjavik Fleet Leasing. Exit value estimation.
The "VC Method" of valuation
Summary of course and review of key concepts

Case Studies


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Copyright © 2008 Ian H Giddy. All rights reserved.