|What is Strategic Corporate Valuation?
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
restructuring techniques and financing instruments.
This three-day course offers an in-depth study of the strategic applications
of corporate valuation techniques with a special emphasis on the
of value creation in corporate financing and mergers and acquisitions.
Starting with the company's "value drivers," we introduce the key
- investment, financing and risk management - that contribute to
value. Running through the key computations corporate
we discover the assumptions behind common models and ratios. We apply this to
several case studies, revealing also
how divestiture, an acquisition, a leveraged buy-out, or other restructuring can alter the value of a
The workshop will include case studies of actual corporations and how valuation methods influence their strategy,
well as hands-on
exercises, and will give participants the opportunity to demonstrate
understanding of techniques through presentations and discussions.
Who Should Attend?
The seminar is of relevance to both corporations and financial service professionals: corporate finance officers,
commercial and investment
securities analysts; investment officers; corporate treasurers and
individuals whose professional future may be enhanced by an
of advanced corporate valuation techniques.
Some Features of the Course
What can delegates expect to gain from this course?
or update fundamental corporate finance skills
- Identify 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
- Be able to identify appropriate valuation techniques for unusual
situations such as distress, synergistic mergers, and going private
- Apply the principles of strategic corporate valuation in both developing and
Delegates will be provided with a package of
useful for corporate valuation, including
pertinent articles, and sample spreadsheets from
actual deals done and case studies.
|| Strategy and Valuation
- Why valuation matters -- and why most companies are undervalued
- The 5 principles of corporate finance
- The corporate value drivers, and how to change them
- Valuation as a tool to discover restructuring opportunities
- Measuring value: implementing the free cash flow approach
- Valuing a company at the equity level versus whole-firm value
- Basic valuation methods
- How business risk combined with financial risk influences investors' return expectations
- Case study: Autolinks.
Delegates evaluate the business and financial risk of this Finnish
private company, and how it impacts the company's value.
Valuing the Business
- Valuation methods as strategic tools
- Asset-based valuation
- Using comparables
- Discounted cash flow analysis
- Example: valuing IBM 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: Mt Cameroon Ecotours. Can you develop a valuation for this West African company to help it raise private equity financing?
Strategy and valuation
Mt Cameroon Ecotours
of capital spreadsheet
Active Generation spreadsheet
|| Applying Valuation Methods to Mergers, Acquisitions and Divestitures
Valuation for 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
- Total cost computation
- Identification and valuation of operational synergies
- Identification and valuation of control gains
- Case study: Optika & Schirnding. 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 for a Kuwaiti company.
- Break-up valuation method
- Example: John Deere. Should an agricultural equipment company spin off its finance division? What is the company's break-up value?
- When should a company divest a business?
- Case study: Pinault-Printemps-Redoute Delegates learn how to perform a before-and-after divestiture analysis for a French retail group.
Strategic Valuation: The Option to Expand
- The method of "option-based valuation" for a company
- Option valuation for a company in distress
- Option valuation for a strategic investment
Study: Disney Mexico. Disney's
proposed new theme park in Mexico has a negative net worth, according
to conventional DCF methods. Delegates will analyze how option-based
valuation techniques can offer insight into why the company places a
positive value on such a risky investment.
| Corporate Financial Restructuring
- What is corporate financial restructuring?
- Applying the value drivers to corporate restructuring
- Organizational vs financial restructuring
- Leverage: the good, the bad and the ugly
- Adjusting the costs of debt and equity for leverage
- Synthetic ratings and debt pricing
taxation and capital structure
- Finding the optimal capital structure: debt, equity or mezzanine?
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.
- Restructuring excessive debt and rasing capital
- Example: Zombie, Inc. Restructuring in a distress situation
- Leveraged recapitalization and exchange offers
- Case study: Cap des Biches.
Delegates consider the method of debt restructuring proposed by this
African company, from the point of view of outside shareholders as well as
Valuation for Leveraged Buyouts
- Going public: liquidity and value gains
- Why go private?
- Case study: Webhire Chooses Privacy
- Implementing a management buyout: senior, mezzanine
and equity finance
- Debt capacity analysis
- The "VC Method" of valuation
- LBO cash flow analysis
study: Flexics ME. The controlling owner of this Dubai-based plasma
company is seeking a means of realizing its corporate value. What is it
worth in the IPO market, and could it be worth more to LBO investors?
What is Flexics ME worth as an acquisition target to Photronics, and how
much of a premium should be paid?
- Summary and Recap
Cap des Biches
Cap des Biches solution
Corporate Finance and Debt
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
of International Fixed Income Research at Drexel Burnham Lambert from
to 1989. The author of more than fifty articles on international
Dr Giddy has served at the International Monetary Fund and the U.S.
and has been a consultant with numerous financial institutions and
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
Money Market, The Handbook of International Finance, Cases
in International Finance, Global Financial Markets, Asset
Securitization in Asia, and The
Hudson River Watertrail Guide.