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Euromoney Training
Amman, Jordan
Strategic Corporate Valuation Workshop
Prof. Ian Giddy
New York University

What is Strategic Corporate Valuation?
Strategic 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 M&A, restructuring techniques and financing instruments.

The Workshop
This three-day course offers an in-depth study of the strategic applications of corporate valuation techniques with a special emphasis on the sources of value creation in corporate financing and mergers and acquisitions. Starting with the company's "value drivers," we introduce the key decisions - investment, financing and risk management - that contribute to shareholder value. Running through the key computations corporate valuation, 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 company.

The workshop will include case studies of actual corporations and how valuation methods influence their strategy, as well as hands-on exercises, and will give participants the opportunity to demonstrate their 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 bankers, securities analysts; investment officers; corporate treasurers and other individuals whose professional future may be enhanced by an understanding of advanced corporate valuation techniques.

Some Features of the Course

What can delegates expect to gain from this course?

  • Learn 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 developed markets
Delegates will be provided with a package of materials useful for corporate valuation, including pertinent articles, and sample spreadsheets from actual deals done and case studies.

Outline of Workshop



Day One 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
Valuation methods

Case Studies
Active Generation
Mt Cameroon Ecotours

P/E Ratios
Industry ratios
Cost of capital spreadsheet
Active Generation spreadsheet
Valuation-related spreadsheets
Day Two  Applying Valuation Methods to Mergers, Acquisitions and 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.
Valuation for Divestitures
  • 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
  • Case 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.

Merger valuation
Option-based valuation

Case Studies

Celtel solution
Equity variance data

Day Three
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
  • 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.
  • 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 managment.

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
  • Case study: Flexics ME. The controlling owner of this Dubai-based plasma technology 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

Leveraged buyouts

Case Studies
Cap des Biches
Flexics ME


Debt restructuring
Oracle solution
Cap des Biches solution
LBO Model
Corporate Finance and Debt Capacity Tables

Additional Resources
Background Reading
Methods of Corporate Valuation
Notes on cost of capital and capital structure .
Critique of Valuation Methods
Private Equity Valuation Guidelines
A Company in One Page
The Fool's Method
Warren's World
Corporate Financial Restructuring
Real options valuation

Useful Links (summary data and financials) (summary financials) (treasury rates, corporate bond prices and ratings) (bond ratings) (corporate bond spreads) (industry ratios) (corporate financial ratios)

Workshop Instructor

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 Director of International Fixed Income Research at Drexel Burnham Lambert from 1986 to 1989. The author of more than fifty articles on international finance, Dr Giddy has served at the International Monetary Fund and the U.S. Treasury and has been a consultant with numerous financial institutions and corporations 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 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. | | | | contact
Copyright ©2006 Ian Giddy. All rights reserved.