Mergers & Acquisitions for Entrepreneurs - Kevin Mulvaney Olin 101
Session 1
M&A world is just 40 years old - actually pretty young.
70s - mergers (ESOP)
80s - Conglomerate challenge (LBO, MBO)
90s - International Capital Markets Expand cycle '00-'10 Debt impact on m&a LDC Expansion/entry
Today - Large Corporations / Fortune 1000 Middle market small business ($1-10m)
Acquisition Process:
Acquisition Strategy
Targeting, Analysis and Valuation
Letter of Intent
Due Diligence
Negotiation and Agreement
Closing and Management Strategy
Session 2, Sep 05 2012
Deal Evaluation Process Steps:
In almost every deal this is the flow of the Buyer’s process in evaluating and development of a bid proposal
Opportunity Evaluation
Risk Evaluation
“Adjustments’ to historical financials
Buyer Strategy and Impact on Pro Formas and Deal Structure
Deal Structure –Stock vs. Asset Deal and how are cos. In this industry sold?
Valuation Alternatives for this industry and find at least three valuation metrics
Financing Alternatives relative to this type of deal
Model Financing linked to Valuation
Test Financing and Valuation via Coverage Ratio in Pro Forms
Due Diligence List
Management Plan
Operations Plan
Day One Strategy
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Session 2 slides
Public vs Privately owned companies - slide
Hockey Stick concept
On slide 10 - Valuation methodologies:
DCF comes in the last. Th eindustry does the multiples analysis and benchmarks first, brings the valuation in a zone and then does the DCF.
FCF is a better measure than the BIDTA, but still this is not a perfect mechanism.
Hint: Dealbook 3 FCF
In M&A the Fair market value is what counts.
The Banks also care just about teh fair market value of all teh assets.
Cash is King
Case: Martin Smith
Three options of acquisition
Rustica
Yellowstone CB
Wildflower
What thought process do you use to make a buying decision.
Session 3 - Sep 12, 2012
Three Cs
Cash Flow
Collateral
Coverage Ratio
Fojtasek Case discussion:
Solutions:
Heritage, LBO, MBO (management buyout), Leverage recap, Merger, Pvt placement, restructure, IPO, ESOP, Do nothing, Sell company.
Heritage: Pvt IPO Pvt companies looking for liquidity events have less options
LBO (Leveraged Buyout): Combination of equity on the Balance sheet contributed by the http://en.wikipedia.org/wiki/Leveraged_buyout
MBO (management buyout): http://en.wikipedia.org/wiki/Management_buyout
Leveraged Recapitalization: Take debt and buy back Equity from the owner http://en.wikipedia.org/wiki/Leveraged_recapitalization
Private Placement: a single buyer of a chink of stock
ESOP (Employee Stock Ownership Plan) http://en.wikipedia.org/wiki/Employee_stock_ownership_plan
Session 4 - Sep 19th 2012
Acquisition Process:
Targeting and analysis
Letter of intent
Due diligence
Negotiating an agreement
Closing
Management strategy
Objectives of the Letter of Intent:
Session 6 - Oct 3rd 2012
The strategic buyer is going to be different than the financial buyer.
In US we have UCC: Uniform Commercial Code
In an M and A deal
Session 1
M&A world is just 40 years old - actually pretty young.
70s - mergers (ESOP)
80s - Conglomerate challenge (LBO, MBO)
90s - International Capital Markets Expand cycle '00-'10 Debt impact on m&a LDC Expansion/entry
Today - Large Corporations / Fortune 1000 Middle market small business ($1-10m)
Acquisition Process:
Acquisition Strategy
Targeting, Analysis and Valuation
Letter of Intent
Due Diligence
Negotiation and Agreement
Closing and Management Strategy
Session 2, Sep 05 2012
Deal Evaluation Process Steps:
In almost every deal this is the flow of the Buyer’s process in evaluating and development of a bid proposal
Opportunity Evaluation
Risk Evaluation
“Adjustments’ to historical financials
Buyer Strategy and Impact on Pro Formas and Deal Structure
Deal Structure –Stock vs. Asset Deal and how are cos. In this industry sold?
Valuation Alternatives for this industry and find at least three valuation metrics
Financing Alternatives relative to this type of deal
Model Financing linked to Valuation
Test Financing and Valuation via Coverage Ratio in Pro Forms
Due Diligence List
Management Plan
Operations Plan
Day One Strategy
--------
Session 2 slides
Public vs Privately owned companies - slide
Hockey Stick concept
On slide 10 - Valuation methodologies:
DCF comes in the last. Th eindustry does the multiples analysis and benchmarks first, brings the valuation in a zone and then does the DCF.
FCF is a better measure than the BIDTA, but still this is not a perfect mechanism.
Hint: Dealbook 3 FCF
In M&A the Fair market value is what counts.
The Banks also care just about teh fair market value of all teh assets.
Cash is King
Case: Martin Smith
Three options of acquisition
Rustica
Yellowstone CB
Wildflower
What thought process do you use to make a buying decision.
Session 3 - Sep 12, 2012
Three Cs
Cash Flow
Collateral
Coverage Ratio
Fojtasek Case discussion:
Solutions:
Heritage, LBO, MBO (management buyout), Leverage recap, Merger, Pvt placement, restructure, IPO, ESOP, Do nothing, Sell company.
Heritage: Pvt IPO Pvt companies looking for liquidity events have less options
LBO (Leveraged Buyout): Combination of equity on the Balance sheet contributed by the http://en.wikipedia.org/wiki/Leveraged_buyout
MBO (management buyout): http://en.wikipedia.org/wiki/Management_buyout
Leveraged Recapitalization: Take debt and buy back Equity from the owner http://en.wikipedia.org/wiki/Leveraged_recapitalization
Private Placement: a single buyer of a chink of stock
ESOP (Employee Stock Ownership Plan) http://en.wikipedia.org/wiki/Employee_stock_ownership_plan
Session 4 - Sep 19th 2012
Acquisition Process:
Targeting and analysis
Letter of intent
Due diligence
Negotiating an agreement
Closing
Management strategy
Objectives of the Letter of Intent:
Session 6 - Oct 3rd 2012
The strategic buyer is going to be different than the financial buyer.
In US we have UCC: Uniform Commercial Code
In an M and A deal
