M & A Financing: Modelling and Strategy
Course
In City Of London
Description
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Type
Course
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Methodology
Inhouse
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Location
City of london
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Class hours
12h
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Duration
2 Days
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Start date
Different dates available
Would you like to learn more about mergers and acquisitions?
During this course participants will learn about the strategic and financial reasons for M&A deals. The course will begin with an introduction to mergers and acquisitions and the strategic and financial reasons for doing M&A deals.
Participants will then complete a merger model by modelling and valuing synergies and assessing the benefits of each of the different financing options available. There will be an emphasis on sourcing historic data, estimating key forecast ratios and forecasting integrated income statements, balance sheets & cash flow statements.
With regard to synergies, the course will give an introduction to synergies and cover operational and financial synergies. There will be a case study to calculate net synergy benefits, as well as case studies regarding valuation. Scenario and sensitivity analyses will also be covered.
In addition, participants will consider pro forma accounts post acquisition and assess the impact of EPS accretion and dilution. The value of the combined enterprise and the synergies in particular will be calculated.
Participants will also learn how to structure transactions, including asset share transactions and cash/debt free transactions.
Facilities
Location
Start date
Start date
About this course
Each participant will need to bring a laptop with a USB port and Microsoft Office.
Reviews
Subjects
- M&A Financing
- Corporate Finance
- Excel Modelling
- Forecasting
- Financial Ratios
- Valuation
- Financing Matrix
- Sensitivity Analysis
- Share Transactions
- Debt Financing
Teachers and trainers (1)
Former Practitioner
Contact us for details enquiries@redcliffetraining.co.uk
Course programme
Course Content
Introduction
Structure of the course
Getting started
Background to M&A
Strategic reasons for M&A deals
Financial reasons for M&A deals
Introduction to case study
Modelling
Case study: motivation for a transaction and anticipated outcome
The structure of an M&A model
For the target and bidder companies:
· Sourcing historic data
· Estimating key forecast ratios
· Forecasting integrated income statement, balance sheet & cash
flow statement
· Calculating key financial ratios (EPS, return on capital)
· Calculating key valuation/ trading ratios (EV/ EBITDA, EV/ EBIT,
EV/ Sales, PER)
· Calculating enterprise value
· Checking the integrity of the forecast data
Synergies
M&A rationale - defining synergies
Operational synergies: source
Financial synergies: source
Empirical evidence re. synergy benefits
Case study: calculating net synergy benefits, critique of business plan assumptions and revised estimates
Dividing up the synergy benefits between the parties
Modelling the division of synergies and calculating key transaction valuation ratios (EV/EBITDA, EV/EBIT, EV/Sales, PER)
Case study: valuation of the standalone business
Review of DCF valuation for standalone entities
Financing considerations & options
Financing matrix
Determining optimum capital structure - balancing operational and financial risk
Modelling capital structure post consolidation, calculating debt, equity and goodwill created on acquisition and revised bidders enterprise value
Consolidated accounts
Modelling pro forma accounts post acquisition, using pro forma balance sheet adjustments, calculating key financial ratios (EPS, return on capital)
EPS accretion/ dilution - its use in decision making
Case study: valuation of combined business
DCF valuation of the combined business
DCF valuation of the synergies
Comparing the valuation of the standalone businesses and synergies
to the combined business
Sense checking the output
Sensitivity analysis
Sensitivity analysis using a variety of tools
Sensitivity analysis on:
· Forecast operational ratios (sales growth, margins, capex etc)
· Valuation inputs (discount rate, growth rate)
· Financing inputs (offer price, capital structure)
Structuring transactions
Implications for headline press announcements
Asset/ share transactions
Cash free/ debt free
M & A Financing: Modelling and Strategy