Practitioner's Complete Guide to M&As: An All-Inclusive Reference(635 Wiley Finance)

Table of Contents:
Preface xi Acknowledgments xiii TOPIC 1 Strategy Development, Then M&A 1 TOPIC 2 M&A Process: Front to Back 13 TOPIC 3 Why M&A? 17 TOPIC 4 Deal Criteria 19 TOPIC 5 Deal Sourcing 26 TOPIC 6 Fees for Services 29 TOPIC 7 Financial and Strategic Buyers 36 TOPIC 8 How Long Will It Take to Complete the Deal? 38 TOPIC 9 Confidentiality Agreements 39 TOPIC 10 "Concern Capture" Due Diligence 44 TOPIC 11 Keep Deal Conversations Quiet 53 TOPIC 12 Auctions 54 TOPIC 13 Seller’s Prospectus 62 TOPIC 14 Pay for Inherent Capabilities Only 65 TOPIC 15 Platform Value 68 TOPIC 16 Buyer and Seller Value Perspectives 70 TOPIC 17 Integration Initiatives Will Determine Deal Value 73 TOPIC 18 Unlock Hidden Value: The Lean Enterprise 75 TOPIC 19 The Real Deal: Lean 78 TOPIC 20 Valuation: An Introduction 82 TOPIC 21 Discounted Cash Flow: An Introduction 86 TOPIC 22 Free Cash Flow 90 TOPIC 23 Fair Return on a Deal 95 TOPIC 24 Risk-Free Rates 104 TOPIC 25 Equity Risk Premiums 105 TOPIC 26 What Is Business Risk? 106 TOPIC 27 Entropy: Tendency toward Negative Variation 110 TOPIC 28 Equity Investor Risk 112 TOPIC 29 Beta 113 TOPIC 30 Systematic Risk 116 TOPIC 31 Unsystematic Risk 118 TOPIC 32 Beta with or without Debt 119 TOPIC 33 Beta: Levered or Unlevered 120 TOPIC 34 Beta Application in Determination of CU 123 TOPIC 35 Levered Beta Moves as Debt to Equity Moves 125 TOPIC 36 Size Premium 127 TOPIC 37 Weighted Average Cost of Capital 130 TOPIC 38 Terminal Values, Terminal Value Multiples, and Terminal Value DCFs 137 TOPIC 39 Discounted Cash Flow Valuation Illustrated 142 TOPIC 40 Leverage: The Real Deal 147 TOPIC 41 Debt Limits 149 TOPIC 42 Debt Adds Value: Derivation of Dt 151 TOPIC 43 The Leveraged Buyout; Definition and Valuation 155 TOPIC 44 Valuing the Leveraged Buyout 160 TOPIC 45 Real Option Valuation: An Introduction 169 TOPIC 46 Real Option Valuation: Application and Illustration 173 TOPIC 47 M&A Values Are Not All the Same 179 TOPIC 48 Discounts and Premiums 183 TOPIC 49 Discounted Cash Flow Valuations: Minority or Control 192 TOPIC 50 Inflation in DCF Valuations 194 TOPIC 51 Integration, Alignment, and Synergy Benefits: Plan It Out 195 TOPIC 52 Integration, Alignment, and Valuing Synergy Benefits 197 TOPIC 53 Venture Capital Valuation 208 TOPIC 54 Discount Rates and Valuing Free Cash Flow 211 TOPIC 55 Growth, C*, and Return: The Engine to Increased Valuations and Deferred Tax Advantage 222 TOPIC 56 How Fast Can the Target Grow? 225 TOPIC 57 Cash Flow Multiples, Growth Rates, and Discount Rates 227 TOPIC 58 Comparable Multiples 239 TOPIC 59 Converting FCFM to P/Es and Other Valuation Multiples and Deriving Slot Multiples for Public Companies 247 TOPIC 60 EBITDA Valuation Engine 264 TOPIC 61 Free Cash Flow Equivalent Impacts for Arbitrary Adjustments to Discount Rates 276 TOPIC 62 Transferring Defined Benefit Pension Plan Liability Issues 278 TOPIC 63 Environmental Remediation Expenses 282 TOPIC 64 Environmental Insurance 283 TOPIC 65 Management Warrant Incentive Plans 285 TOPIC 66 Negotiation: Introduction and Overview 290 TOPIC 67 Negotiation: Values, Offers, Prices, and Risk Assumption 292 TOPIC 68 Negotiation: Offer Content 296 TOPIC 69 Negotiation: Create Space in Your Ideas 298 TOPIC 70 Negotiation: Beware of the Emotions of Private Sellers 299 TOPIC 71 Negotiation: Imprint; Do Not Lecture 301 TOPIC 72 Negotiation: Handling Tight Spots 303 TOPIC 73 Negotiation: Closing the Bid-Ask Negotiating Gap 305 TOPIC 74 Negotiation: Be Aware of Leverage and Deal Momentum Shift 308 TOPIC 75 Negotiation in the Final Stages 311 TOPIC 76 Negotiation: Use Earn-Outs or Noncompete Agreements to Close a Bid-Ask Gap 313 TOPIC 77 Negotiation: After the Deal Is Agreed 318 TOPIC 78 Negotiation: Bluffing and How to Handle It 321 TOPIC 79 Negotiation: When Do You Step Away? 324 TOPIC 80 Negotiation: When Do You Proceed? 326 TOPIC 81 Negotiation: Do a Time Capsule 328 TOPIC 82 Negotiation: Build Trust to Get Closed 329 TOPIC 83 Exits under Duress: Have a Plan if the Deal Does Not Work 333 TOPIC 84 Structuring the Deal: An Overview 334 TOPIC 85 Structuring the Deal: Asset Step-Ups, Noncompete, and Synergy Valuation Engines 341 TOPIC 86 Total Shareholder Return 346 TOPIC 87 Stakeholder Value Creation 349 TOPIC 88 EVAquity: Align Shareholder and Management Interests 353 TOPIC 89 Letter of Intent 358 TOPIC 90 Purchase and Sale Agreement 359 TOPIC 91 Purchase and Sale Agreement: Explanation by Section 361 TOPIC 92 Purchase Price Adjustments for Working Capital 370 TOPIC 93 Indemnification and Survival Provisions 374 TOPIC 94 Escrows 379 TOPIC 95 Joint Venture Transaction: Valuation and Structuring Overview 381 TOPIC 96 Why Deals Go Bad 389 TOPIC 97 After the Deal: Do a Deal Bible 391 TOPIC 98 Do the Audits of the Integration and Deal Value Creation Plan 393 About the Web Site 395 Index 397

About the Author :
DAVID T. EMOTT is a seasoned manager with over twenty-five years of progressively greater responsibility in directing corporate strategy development, M&A and joint venture initiatives, performance measurement, strategic planning, control, financing, information technology, and tax planning activities in international and domestic theaters. He currently runs his own consulting business, D.T. Emott Advisory LLC, which provides services to buyers and sellers of companies or operating units.