I promised to post the compete outline for our upcoming course in Amsterdam on Acquisition Finance. Here is is. There is still time to sign up - we hope to meet you there.
All the best,
Ralph
Wednesday
December 9, 2015
Time: 09.00
– 13:00
•
Introduction
• Overview
of Acquisition Finance: Structuring the Deal
This session presents an overview of
the program - outlining advantages, risks and current trends in acquisition
finance. Particular attention is given to sources of gains in acquisition
finance and the opportunities and risks entailed in highly levered
transactions. The following topics will be discussed:
o
How Acquisition Finance Creates Value
o
Participants, Products, Risk and Return
o
The Importance of Markets
o
The Whole Deal Approach:
§ Understanding
Participant Motivations
§ The interaction
of Deal Components
•
The
Acquisition Process
o
Timeline
of the Acquisition Process
o
Motives
for Acquisition
o
Characteristics
of Targets
o
Types
of Deals
o
Ideal
Qualities for LBO Candidates
•
Key
Participants and Markets in Acquisition Finance
o
PE
Sponsors
o
Institutional
Equity Investors
o
Management
o
Lenders
o
Corporate
o
Understanding
Markets
o
Current
European Market Overview
•
Valuing
the Target– a Quick Review
This session provides a review of
valuation tools and models, discussing the strengths and weaknesses of each as
well as their application to acquisition finance.
o
Discounted
Cash Flow
o
Multiples
o
Comparable
Transactions
o
Determining
the Discount Rate in DCF
o
Terminal
Value and The Exit Process
o
Valuing
Synergies
o
Specialized
Cases
Time: 13.00
- 14.00 Lunch
Wednesday
December 9
Time: 14.00
- 15.30
·
Valuing
Late-Stage Companies and Buyouts
·
Mergers
and Acquisitions: Who Wins? Who Loses
o
Measuring
Abnormal Returns
o
Assumptions
behind Event Studies
o
The
Empirical Evidence
o
Adjusting
for Anticipation
•
Deals
in the News: including Ahold/Delhaize, ABN-IPO, Perrigo/Mylan, Noikia
Cablevision
Time: 15.30 - 15.45 Break
Time:
15.45 -
17.00 Initial Case Preparation: "Monmouth”
o
The
management of Monmouth Inc. is considering whether to acquire the Robertson
Tool Company and the value and form that the acquisition should take. Value can be assessed using a variety of
approaches including a DCF with WACC analysis, impact on EPS and market
multiples. The case also requires
consideration of how the offer should be designed and implemented.
Case material
·
“Monmouth”
Pre-reading material
•
Rosenbaum and Pearl: Investment Banking
o
Chapter
1 - "Comparable Companies Analysis”
o
Chapter
2 – “Precedent Transaction Analysis”
o
Chapter
3 – “Discounted Cash Flow Analysis”
•
Joseph
Rizzi: “Back to the Future Again: Private Equity After the Crisis”, Journal of
Applied Finance, Volume 19, No. 1&2 2009
•
Valuation
of Late-Stage Companies and Buyouts, UVA-F-1639 by Susan Chaplinsky
Thursday
December 10
Time: 09.00
– 11.30
· Debriefing of Day 1 and Introduction
to Day 2
· Capital Structure - Theory
o
How
Capital Structure Creates or Destroys Value
o
Capital
Structure Theory – A Review
o
The
Three Impacts of Debt
o
Debt
vs. Equity
o
Empirical
Evidence
· Capital Structure - Practice
o
Historical
Overview
o
Understanding
the Cycle of Purchase Price Multiples
o
Different
Approach of PE re Valuation and Capital Structure
Time:
11.30 -
13.30 Working Lunch
Continued Case Preparation:
"Monmouth”
Time: 13.30
– 14.45
•
Discussion
of Monmouth Case
Time: 14.45
– 15:00 Break
Time: 15.00
– 16.30
·
Financing
the Deal
o
Products
o
Building
the Capital Structure
o
Tools
Time: 16.30
– 17.00
·
Introduction
to the Radnet Case
o
This
case examines issues surrounding the choice of financing arrangements for the
acquisition of Radiologix. The case follows Mark Stolper, the CFO of RadNet, as
he considers how to raise the $363 million in funds necessary to finance the
acquisition. When completed, the combined firms will be the largest private
diagnostic imaging provider in the United States. When Stolper joined RadNet three
years earlier, he confronted a company with "too much debt, and the wrong
kind of debt." His goal is to finance the acquisition in a way that
further enhances the financial strength and operating flexibility of the
company. Given the large size of funding required, the firm will unlikely be
able to fund the entire transaction with first lien or bank debt. His financial
advisors differ in their recommendations for how to raise the remaining funds.
Thursday
December 10
Pre-reading
material
•
Joseph Rizzi: “How much debt is right for your deal? The impact of market innovations on debt
capacity”
•
Rosenbaum and Pearl: Investment Banking
o
Chapter 4 - “Leveraged Buyouts”
o
Chapter 5 - “LBO
Analysis”
Social Event: 17.00
- 18.30 Drinks with AIF
Friday December 11
Time: 09.00
– 13.00
•
Debriefing of Day 2 and Introduction to Day 3
•
Structuring the Deal: Mitigating Risk
o
The
Most Important Risks of the Deal
o
Mitigating
Deal Risk
•
Structuring the Deal
o
Covenants
o
Expanding
Debt Capacity
o
Subordination
o
Due
Diligence
•
Hostile Deals, Activists and Arbs
o
Hostile
Takeovers
o
The
Role of Activists
o
The
Importance of Arbs
o
Defensive
Strategies of the Target
o
Understanding
Speculation Spreads and What They Reveal
•
Continued
Case Preparation: “Radnet Inc.: Financing an Acquisition”
Time: 13.00
- 14.00 Lunch
Time: 14.00
– 15.00
· Continued Case Preparation: “Radnet
Inc.: Financing an Acquisition”
Time: 15.00
– 15.15 Break
Time:
15.15 – 16.45
· Discussion of
the Radnet Case
o
Operating
flexibility
o
Composition
of investors
o
Repayment
considerations
o
Type
of debt
o
“The
wrong type of debt”
· Wrap-up –
Putting it All Together
· Concluding comments
Time: 16.45
- 17.00
•
Completion
of AIF Evaluation Form
Case material
•
"Radnet Case”
(to be distributed during class on
Day 1)
Pre-reading
material
•
Rosenbaum and Pearl: Investment Banking
o
Chapter 6 - “Sell Side M&A”
o
Chapter 7 - “Buy Side M&A”
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