A comprehensive 4-day training programme for professionals in corporate finance, investment banking and M&A.
Delegates will learn how to:
- Value target companies by different methodologies as DCF- method, dividend discount model, market multiples valuation and transaction comparables
- Understand free cash flow for company valuations and structuring acquisition loans
- Use the right discount rate
- Calculate the value of a company in the M&A market
- Identify synergies as valuation drivers
- Understand the debt capacity and the financing structures of acquisitions
- Analyse, value and execute a corporate valuation in an IPO
- Value growth and internet companies by appropriate methodologies
Course outline
This course provides the delegates with an in depth understanding of corporate valuation.
The course starts with an introduction to the most recent trends in the industry in mature and developing markets. Then delegates will analyse the importance of the free cash flow concept in order to assess the viability of investments and acquisitions.
The different valuation methodologies mostly used by corporate finance experts will be applied to target companies in different industries. Delegates will establish valuation ranges for different target companies based on the Dividend Discount-, the Gordon Growth- and DCF- methodologies. The valuation range established by these traditional valuation forms will be verified by market driven valuation methodologies as using market multiples and transaction comparables.
In a second stage, the course will teach how companies are valued in the M& A market and how leveraged and acquisition loans can be structured. In addition the pricing of the different financial instruments as senior and junior bank debt, debt capital market instruments and hybrid forms as mezzanine, convertibles or warrants will be discussed.
In two real life case studies from the banking and the auto sector, the delegates will learn how to identify synergies and haw to value them in a corporate acquisition. In this context it will be explained why growth companies and companies based on intellectual property as many internet enterprises are valued by different methodologies.
On the final day, an in-depth analysis of the primary and the secondary market will explain the structural elements of an IPO offering, the pricing of IPO candidates and how banks underwrite and place these issuances. A particular emphasis will be laid on the private equity industry: the value creation of PE- firms, their financing techniques and the different exit strategies.
Programme features
This programme draws on the knowledge and practical experience of an internationally experienced executive who has worked for some of the largest financial institutions in the world. The course applies to managers, professionals and advisors in the field of banking, corporate finance, consultants and financial advisors.
The training will use teaching methods based around lectures, case studies, practical exercises and class room discussions. The course will use real life case studies and examples to develop delegates’ understanding of all aspects of the corporate finance business.
Participants will learn to apply the key principles to value companies, to design an appropriate financing structure and enhance the value of the portfolio investments and optimise potential exit strategies. The characteristics of the equity markets will be introduced and the performance of different structures in the primary and secondary markets will be compared with each others. The program will address the application of hybrid structures as well.
Delegates will discuss how corporate managers, bankers and advisors can cooperate successfully in complex merger and acquisition transactions and leveraged transactions in order to realise financial and operational synergies in business combinations. Key learnings from failed merger projects will be discussed.
Who should attend?
- Members of the corporate finance division and the M& A department of banks
- Professionals in the PE and VC industry
- Professionals in the M&A and strategic planning department of companies
- Members of the M&A, IPO and capital markets divisions
- Consultants and advisors in the field of financial services
- Members of the strategic department
- Professionals in the HR Department
Day 1
The valuation of companies
• Welcome and introduction
• Programme overview
• Delegates’ expectations
Session 1: Cash flow based valuations
• The concept of free cash flow
• The difference of cash flow compared to earnings
• How to calculate free cash flow
o Determining working capital
o Identifying value drivers
o Incorporating growth, CAPEX, working capital, interest expenses and taxes
o Determining appropriate forecast period and growth phases
• Choosing the right time frame
• Looking at terminal value
Case study: Calculating the free cash flow of an company from its financial statements
Session 2: Calculating the cost of capital
• Calculating the cost of debt
• Calculating the cost of equity
• The sources of data
• Finding the right peer groups
• Understanding the weighted average cost of capital (WACC)
• The ß- factor as measurement of risk
• The risk free rate and the market premium
• The CAPM- model
• Calculating the cost of capital of a privately owned company
• Leveraging and deleveraging beta
Workshop: Calculating the cost of capital of a private and a stock listed company
Case study: Company valuation based on the DCF- methodology
Session 3: Determining the maximum debt capacity of a company
• Traditional approaches from earnings or profit
• Understanding the DCF- methodology
• Calculating sensitivities for
o CAPEX, working capital, WACC
o Operational efficiency
o Choosing the right discount rate
o Maturity, repayment
o Terminal value
• Incorporating growth assumptions
• Comparable transactions and the competitive landscape
• Understanding risk in acquisition transactions
Workshop: Calculating the maximum debt capacity of a company
Day 2
Market driven company valuations
Session 1: Valuation by multiples
• Understanding best practice
• The rationale for valuations based on multiples
• Choosing the right peer group from different capital markets
• Eliminating outliners
• Equity multiples
o P/E, P/B,
• Enterprise multiples
o EV/ EBITDA, EV/EBIT, P/sales
• Using transaction multiples in different industries
• Identifying and comparing non financial ratios
• Applying multiples in corporate finance
Case study: The valuation of a telecom company by applying different valuation methodologies
Session 2: The dividend discount model
• The importance of the dividend discount model
• Advantages of the dividend discount model
• The Gordon Growth Model
• Understanding value drivers
o P/E, P/B, ROE and COE
o Importance of a company’s gearing
o The sustainable growth factor
• Identifying over- and under valuations of traded stocks
• Understanding performance ratios
Case study: The valuation of a bank by applying the dividend discount model
Session 3: The Gordon- Growth- Model
• Concept of the Gordon- Growth- Model
• The relevance of the model
• Which industries apply the concept most?
• Advantages and disadvantages of the approach
• The two step Gordon Growth Model
• The three step Gordon Growth Model
• Understanding the value drivers
• Identifying over- and under valuations
Case study: The valuation of a telecom company by applying the Gordon Growth Model
Session 4: Valuation by performance ratios
• The conceptual background
• When are performance ratios mostly used?
• Establishing a price range
• Choosing the right peer group from national and international markets
• Performance ratios for different industries
o Chemical, oil, refinery, retail, transportation, cement etc.
Case study: Comparing the relevance of performance ratios in different industries
Session 5: The valuation of growth companies
• Understanding the different segments of the growth landscape
• Analysing the business plan and the strategic value
• Forecasted performance and sensitivity
• Several “Rounds” of financing
• Determining the right capital structure
• Financing of intangible assets
Case study: A guided case study for each of the mentioned valuation approaches
Day 3
Company valuation in the M& A market
Session 1: Understanding the M&A market
• Tracking the M& A market
• Understanding historic transactions in the industry
• Understanding the premiums paid
• Establishing a price range for the target company
• Strategic considerations for an acquisition by
o The buyer
o The seller
• Acquisition versus organic growth
• Types of transactions
• How to pay for the transaction
• Success factors and failures in M&A
Case study: Paying with shares
Session 2: Synergies in the M& A process
• Value creation in M& A
• Which synergies count?
• Identifying and valuing synergies
o Strategic synergies
o Operational synergies
o Market synergies
o Financial synergies
o Cultural synergies
• How synergies influence the valuation?
• Estimating synergies in different industries
• Learning’s from failed and successful mergers
Case study: Analysis of synergies in different acquisition project and markets.
Session 3: The financing of an acquisition
• The takeover structure
• The different forms to pay for the acquisition price
• The importance of financial ratios and maturities in acquisition financings
• Trends in different industries
• Using equity instruments
• The “traditional bank lending” instruments
o Senior, junior and second lien debt
• Capital market driven instruments
o Bonds, mezzanine and convertible structures
• Analyzing the take out structure for the acquisition financing
Case study: Structuring a leveraged acquisition in today’s market
Session 4: Managing the due diligence process
• Introduction
• Planning the due diligence process
• Identifying the key areas of concern
• The management due diligence
• Business and strategic issues
• The financial and operational due diligence process
• Environmental and legal considerations
Case study: List of due diligence “to dos”
Day 4
The IPO Market
Session 1: Reading the IPO market
• The recent trends in equity markets
o Mature markets
o Emerging markets
• Screening the market
• Understanding
o The primary market
o The secondary market
o The investors
o The pricing
o How to structure successful floatation’s
o The institutional and private investors
• The decision to float
o Identifying IPO opportunities
o Strategic considerations
o Floating or selling
o Preconditions to a floatation
o Time table
• Pre- IPO due diligences
• Evaluating an IPO with key valuation ratios
• How banks are selected
• Different forms of underwriting an IPO
• The sales process
• Determining the pricing of an IPO
• Secondary offerings
Workshop: Critical examination of a possible floatation candidate
Session 2: Evaluating an IPO and a secondary offering
• Different valuation approaches to determine the offering price
o DCF valuation from the corporate finance department
o Comparable transactions
o The multiple approach from the equity sales department
o Share price performance in secondary offerings
• Pre- market interviews
• Analysing the existing and comparable shareholder structure
• National and international demand
• Setting the price range
• Offering a fixed committed price
Case study: Pricing an IPO and a secondary offering
Session 3: Underwriting and placing a flotation
• Considerations for a floatation
o The owners
o The company
o Management and other stake holders
• Structuring the IPO offering
o Selling existing shares
o Selling new shares
• The time table of a flotation
• Selecting the underwriting consortium
• electing the book runner(s) and underwriters
o The “beauty contest”
o Contents of the presentation
o Time table for the IPO
• The fee structure of an IPO mandate
• The commitment of the banks
o Firm commitment
o The book building process
• Consideration for the future investor base
• The placing of shares
o Screening the market for investors
o The primary market
o The secondary market
o The green shoe option
• Closing the transaction
• Determining the final price
• Allocating the shares
• Determining the success of the flotation
Case study: Structuring an IPO and running a beauty contest
Summary and recap
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Former member of the Executive Board, ING Europe, BHF - Bank and Bayerische Vereinsbank in New York
The Course Director is an executive with over 25 years experience in banking and consultancy; he is a former member of the executive boards of ING Europe, BHF- BANK and Bayerische Vereinsbank in New York. He was responsible for managing large banking networks, corporate finance and investment banking activities geared towards small and medium sized companies.
In addition, he was frequently involved in restructuring projects to increase the efficiency and profitability of bank organisations, credit processes and risk management functions. Based on his assignments, he has substantial experience in developed and emerging markets.
Prior to joining the banking industry, he worked for almost 10 years for BASF, the world largest chemical company. In this capacity, he was involved in the external funding programme of the company, strategic planning and the analysis and execution of numerous acquisition projects all over the world.
Today, he is specialising in working with leading banks and financial institutions to design their strategies, to enhance profitability by seeking growth opportunities and product innovation, to address risk adjusted pricing and to streamline credit policies and procedures. In addition, he teaches Bachelor and Master courses in Banking and Finance at different universities.
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.
3-5 Dec 2013 (Johannesburg, South Africa)
A three-day financial training course on the valuation of mining companies.
23-25 Jul 2013 (Johannesburg, South Africa)
3-5 Dec 2013 (Johannesburg, South Africa)
23-25 Jul 2014 (Johannesburg, South Africa)
3-5 Dec 2014 (Johannesburg, South Africa)
A 3 day financial training course on financial modelling in excel.
24-27 Jun 2013 (Nairobi, Kenya)
The course provides participants with a working knowledge of the principles and practices of applied corporate finance including: financial analysis, modelling and valuation. This will enable participants to acquire a sufficiently thorough understanding of the subject in order to be able to use the tools and techniques in an effective manner.
22-24 Nov 2013 (Johannesburg, South Africa)
The aim of this intensive 3-day training course is to provide participants with exposure to leveraged and mezzanine financing techniques in the context of M&A and private equity structures. Delegates will be introduced to international practice in executing leveraged transactions, which will include due diligence, accounting issues and valuation techniques. Case studies will include opportunities to structure leveraged finance transactions.
25-29 Nov 2013 (Johannesburg, South Africa)
A 5-day case study based workshop exploring more advanced issues in company valuation and financial modelling.
23-27 Sep 2013 (Nairobi, Kenya)
A 5-day case study based workshop exploring more advanced issues in company valuation and financial modelling.
26-28 Aug 2013 (Johannesburg, South Africa)
27-29 Jan 2014 (Johannesburg, South Africa)
25-27 Aug 2014 (Johannesburg, South Africa)
A practical and highly interactive 3-day training course, incorporating numerous case studies to enhance delegates understanding on the production and transformation of agricultural products and their distribution.
13-15 Aug 2013 (Johannesburg, South Africa)
A 3–day training course dedicated to the valuation, structuring, financing and negotiating of merger and acquisition transactions.
7-9 Oct 2014 (Accra, Ghana)
This comprehensive 3-day workshop builds a financial analysis and valuation model through a series of practical stages.
3-5 Dec 2013 (Nairobi, Kenya)
This 3-day programme focuses upon how the toolkit of conventional business analysis can be linked sequentially and logically with the principles of financial economics. It will provide critical insight into how the tools and techniques of conventional business analysis can and must be adapted.
4-6 Mar 2014 (Lagos, Nigeria)
9-12 Jul 2013 (Nairobi, Kenya)
This comprehensive 4-day management course will improve the effectiveness and success of your banking branch network.
8-11 Jul 2013 (Johannesburg, South Africa)
This 4–day Corporate Finance Applications course is
a practical "how to" programme dealing with numerous disciplines within the subject of corporate finance.
19-21 Jun 2013 (Nairobi, Kenya)
18-20 Jun 2014 (Nairobi, Kenya)
22-25 Jul 2013 (Lagos, Nigeria)
This 4-day intermediate programme equips investment professionals with practical knowhow of new approaches and new asset classes for today’s investment conditions.
5-8 Aug 2013 (Nairobi, Kenya)
A comprehensive 4-day training course, featuring case studies across a range of industries to help course participants practice corporate valuation techniques.
15-17 Oct 2013 (Lusaka, Zambia)
A 3-day financial training course on corporate loan restructuring. With tough liquidity conditions finance professional are required to quickly identify what is causing borrowers problems and provide the most appropriate and costeffective finance solution.
19-21 Aug 2013 (Johannesburg, South Africa)
A comprehensive 3- day course for all financial professionals in banking, corporate finance,
strategic and financial advisory, consulting, M&A departments and private equity houses.
23-26 Sep 2013 (Johannesburg, South Africa)
This program covers how to design a successful corporate banking strategy and provide the adequate products and services to the different customers groups. It applies to banks in developed and emerging markets.
21-24 Oct 2013 (Johannesburg, South Africa)
This 4-day workshop takes a hands-on approach to financial analysis and cash flow techniques.
23-25 Jul 2013 (Johannesburg, South Africa)
This 3-day course has been designed to provide the participants with a complete overview of the venture capital industry and its workings.
12-14 Aug 2013 (Harare, Zimbabwe)
11-14 Nov 2013 (Johannesburg, South Africa)
This 4-day intermediate programme equips investment professionals with practical knowhow of new approaches and new asset classes for today’s investment conditions.
7-9 Oct 2013 (Lagos, Nigeria)
This comprehensive 3-day workshop builds a financial analysis and valuation model through a series of practical stages.
4-6 Aug 2014 (Accra, Ghana)
This practical and highly interactive 3-day financial training course, which incorporates numerous case studies, provides delegates with a thorough understanding of the syndicated loan market, its process and potential.