Course dates
This 3-day workshop includes case studies of actual acquisition financings and how the target companies can be valued. It will show how a variety of techniques, including senior secured leveraged loans, vendor finance, second lien and mezzanine debt can serve as a catalyst to help an acquisition get accomplished. Lecture-discussions, spreadsheet analysis, deal memorandums and hands-on exercises will be used to give participants the opportunity to demonstrate their understanding of techniques that can be employed in funding acquisitions.
What is Acquisition Finance?
Acquisition Finance is the use of debt, equity and hybrid financing techniques to achieve an acquisition or leveraged buy-out in a cost effective manner. The focus of this course will be on identifying the financing solutions that match the company's cash-flow based value and are adapted to the client situation - and this may call for non-standard corporate finance techniques and funding sources.
Featuring:
- How a target company should be valued; how the method of valuation affects the availability of funds from banks, institutional investors and private equity investors.
- How to assess the potential gains from an acquisition; how dependable these projections are, from an investor's viewpoint.
- How much money is needed for the transaction, including fees and restructuring costs
- Understanding the key drivers of M&A finance and how they drive capital structures in today’s market
- Validation of the purchase price using multiples and DCF tools
- Use of corporate finance techniques to determine an appropriate debt quantum
- Quantification of the impact of target capital structures on shareholder value
- Structuring acquisition funding packages using the different funding instruments available by understanding their relative advantages and disadvantages
- Understanding the key terms and conditions of funding instruments used in M&A and their implication on other lenders, investors and shareholders
- What the key terms and conditions are; covenants and pricing, of different sources of acquisition finance, including subordinated notes and high yield bonds
- What one should look for in a cash flow analysis to model the acquisition finance, including the repayment of senior, mezzanine and equity investments
Who should attend?
- Corporate and commercial bankers
- Accountants
- Members of corporate finance and M&A teams
- Corporate treasury executives
- Management consultants
- Lawyers or legal advisors
- Financial and investment analysts
- Investment managers
Day 1
Corporate Valuation, Acquisition Finance Debt Capacity Analysis – the Toolkit
- Introduction to acquisition finance
- How a target company should be valued.
- Review of valuation methods:
- Asset-based valuation
- Using comparables
- Discounted cash flow analysis
- Measuring the weighted-average cost of capital
- How the method of valuation can affect the availability of funds from banks, institutional investors and private equity investors
- Valuing a private company and raising private equity
- How to assess the potential gains from an acquisition and the dependability of these projections, from an investor's viewpoint
Case study: Valuing a business pre and postacquisition and synergy assessment
Day 2
Divisionalised Businesses and Highly Leveraged Structures – LBOs and Private Equity
- Valuing a divisional company and allocating capital
- Frameworks for determining capital structure and the debt equity mix
- Major case study: Assessing capital structure and the debt equity mix
- Valuation for M&A: financial versus strategic viewpoint
- Buy out financing
- Evaluating funding alternatives
- Terms and pricing of the funding, particularly senior and mezzanine debt
Case study: financing an acquisition. The controlling owners of a technology company are seeking a means of realizing the company's corporate value. How could a buyout, or an acquisition, be financed?
Day 3
Acquisition Financing Instruments
- Structuring acquisition funding, the different funding instruments and their relative advantages and disadvantages
- Overview of senior and subordinated financing techniques
- Senior secured loans
Case study: How to price senior debt
- Asset-based finance
- Sale-and-leaseback financing
- Second lien versus senior-sub mezzanine
Case study: Second lien facility. How can a term sheet be adapted to meet client needs?
- Financing with a bond placement
- Private versus public markets
- Terms and pricing of high-yield bond financing
- Mezzanine: Step-up rates, PIKs, participations, warrants, preferred
- The structure and pricing of sub debt and warrants
Case study: What is the effective cost to the issuer of a mezzanine debt issue? Terms and conditions of a mezzanine term sheet
Case study: Examine a term sheet. Which features would an investor, insist on and what might the investor be willing to give way?
- Understanding the key terms and conditions of funding instruments used in M&A and their implication on other lenders, investors and shareholders
Summary and close
Amsterdam Hotel, Amsterdam, Netherlands
This programme takes place on a non-residential basis at a central Amsterdam hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.
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Dr. Roger Mills
Roger Mills is Professor of Fundamental Analysis and Business Valuation at the VU University in Amsterdam, and Emeritus Professor of Finance and Accounting at Henley Business School, University of Reading Management.
Roger has a unique blend of academic and business experience. He has a PhD in Finance, a Masters in Management and a first degree in Psychology, Sociology and Economics. During the professional part of his career Roger trained as a Chartered Management Accountant and he is a Fellow of the Chartered Institute of Management Accountants, the Institute of Chartered Secretaries and Administrators, and the Association of Corporate Treasurers. Roger has written numerous articles and both authored and coauthored many books, the most recent on Financial Statement Analysis and Corporate Finance having been published in 2008. He has consulted to numerous companies and organisations in many countries around the world.
Courses run by this instructor
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
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Course dates