Euromoney Audit Training

A 3-day training program for experienced M&A professionals in investment banks, law and advisory firms

Merger and acquisition activity in Europe and the rest of the world has been very high with scores of megadeals dominating the business headlines. Encouragingly, M&A activity is coming from an array of sectors, from both trade and financial buyers and from a wide range of countries. Euromoney Training’s unique training course on Mergers & Acquisitions hosted by former UBS and HSBC – expert Paul Richards will give you the knowledge you need to take advantage of the current wave of M&A activity.

You will learn about structuring and financing transactions – including the latest innovative financing techniques – and about sound company valuation techniques, which form the basis of all successful deals. The course will also bring an understanding of buyers and sellers’ motivations, the problems encountered when advising clients and how to overcome them through negotiation.

In these corporate governance focused times, the course will pay special attention to the role of due diligence and its impact on value. Furthermore, it will focus on new areas of activity such as arbitrage strategies in M&A situations. Most importantly, Euromoney Training’s Mergers & Acquisitions course will be uncompromisingly practical, using real life case studies and computer simulations to provide a true awareness of what makes M&A work. You will dig down into deals to find out how they were structured, financed, managed and they will be rewarded with exceptional awareness of how to succeed in M&A.

By attending the course, you will:

• Learn the techniques to enhance shareholder value through better capital structuring decisions for acquisitions
• Deepen your knowledge of the methods of valuing companies
• Obtain a greater awareness of how to structure and finance mergers and acquisitions
• Examine the principles involved in structuring highly leveraged transactions
• Develop an understanding of the due diligence process and learn how risk can be managed and mitigated
• Develop negotiating skills in the M&A process
  
  

Day 1

PREREQUISITES TO A SUCCESSFUL DEAL:

Key steps in the M&A process

• Strategic decision making: do companies need to grow?

• Acquisition versus organic growth

• What is success?

• Strategic considerations

• Types of transaction

• Types of synergies

• Screening potential targets

Strategic alliances as an alternative to growth by acquisition

• Advantages of forming alliances or joint ventures

• Structuring the relationship

• Success factors

• Exit routes

• What can go wrong?

• Texas chainsaw clauses in JV agreements

Due diligence: friendly / hostile deals

• Legal risks in acquisitions

• Mitigating risk via due diligence

• Legal protections

• Credit risk in the event of a problem

• Impact of the nature of the transaction (friendly / hostile) on due diligence

CASE STUDY: Issues arising in due diligence for an ice cream distributor

M&A valuation: cash flow approach

• How value is driven by cash flows, not profits

• Calculating free cash flow

• The value drivers and the basis of cash flow valuation

• Cost of equity: dividend models

• Capital structure concepts

• Components of weighted average cost of capital
• Cost of debt: coupon v. yield, market v. book value, tax problems, default risk

• The cost of equity

CASE STUDY: You will value an acquisition target using WACC acting as buyer or seller

Day 2

VALUATION AND STRUCTURING

Multiples based valuation techniques

• Asset valuations: forced sale v. going concern

• Price / Earnings multiples

• Earnings related multiples: EV to EBIT, EBITDA, cash flow, etc

• Other multiples: sales, book value, per pop, PEG, EEG ratio, relative multiples

• Selection of comparable companies

• Cross border issues for valuation

CASE STUDY: A break-up analysis for a major conglomerate Valuation triangulation

• Using comparable deals as valuation benchmarks

• When are comparable deals not relevant

• Measuring the value indicators

• Measuring the premium for control

CASE STUDY: You will undertake a competitive negotiation to price an acquisition

Valuing the acquisition and deal structuring

• Financial analysis: producing pro forma projections

• Valuing synergies and assessing the reality of achieving them

• Analyzing the effect of synergies on financials including earnings

• Assessing the impact on the value of the acquirer's shares

• Paying with shares or cash or a combination?

Pros and cons of each

• The breakeven price earnings ratio for debt

• Dilution of earnings per share and EBIT

• Bridging the valuation gap: earn-outs

CASE STUDY: You will role-play as competing bidders to submit proposals to a vendor

The impact on the financials of the bidder

• Financing with equity or debt? Pros and cons of each

• Establishing the amount of debt that can be used

• Assessing the type of debt that can be used

• Using bridge finance pending equity or debt issues

CASE STUDY: Equity bridge and bond issue bridge by international acquirer

Day 3

FINANCING THE ACQUISITION

Leveraged buy-out as a defence mechanism

• Types of leveraged transaction: LBO, MBO, MBI, BIMBO, IBO, LBU, P2P

• Acquisitions suitable for leveraged finance

• LBO analysis as a valuation metric

• LBO deal structuring: equity and debt

• The leveraged buy-out process

• Leveraged recapitalization as an alternative exit strategy

CASE STUDY: Estimating returns in a recent buy-out of a buy-out (BOBO)

Public M&A transactions

• Takeover codes, practices

• Documentation

• Impact of friendly v. hostile on price, due diligence, financing

• Strategies and tactics – implications for defence

• Regulatory issues

CASE STUDY: You will compete to negotiate Acquisition finance

• Senior debt multiples

• Mezzanine: cost and use of warrants

• Second line financing

• High yield bonds

• Bridges to second stage financings

CASE STUDY: Highly leveraged LBO financing

M&A arbitrage trading

• Hedge fund strategies in M&A situations

• Liquidity costs

• Outcome analysis

• Risk-return trade-off

Hi CASE STUDY: you will compete to run arb trading positions in a takeoverghly leveraged LBO financing

• Paul Richards

  Paul Richards graduated from Cambridge University in mathematics and has a Masters degree in business administration from London Business School. He is also a CFA charter holder, an Associate of the Chartered Institute of Bankers, a Member of the Association of Corporate Treasurers and a Fellow of UKSIP.
  
  Paul has more than 20 years investment banking experience specialising in domestic and international corporate finance at UBS (Warburg), HSBC and Map Securities (part of Skandia Insurance and Mapfre, Spain). He was also the chief executive of the London merchant banking operation of Credit Industriel et Commercial, a major French banking group.
  
  As a result of this experience, Paul has extensive first hand experience of: Mergers and acquisitions; IPOs; bond issues; secondary market issues; privatisation; debt syndications; corporate treasury; equity valuation; investment analysis; security and derivative valuation; private equity; modelling; corporate governance; and compliance. 
  
  Paul won the 2004 Wincott Foundation Prize for his article "Lessons in shareholder value" on the boom and bust in new economy stocks, published in Professional Investor (the journal of the UK Society of Investment Professionals - the UK member society of the CFA Institute). He has taught MBAs and Masters to Finance students at Cass and Cranfield Business Schools for more than 12 years in a range of financial disciplines; and has trained staff at major City houses and in banks on different continents.

  Courses run by this instructor

  • Structuring Leveraged & Mezzanine Finance - New York City
  • IPO’s: Managing, Underwriting & Pricing - New York City
  • Masters in Financial Markets - New York City

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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