Strategic Alternatives: M&A and Buyout Options

Our merger modeling topics introduce critical skills required for understanding how to structure and analyze mergers & acquisitions. After modeling a company's profits / cash flow and valuing the entity, one must decide what to do with the company in the grand scheme of its strategic alternatives, including a merger or acquisition. We introduce the basics of deal structuring and implications on accretion/dilution to building more involved merger models with the complexity of complicated FASB and IFRS accounting rules.

Our LBO modeling courses introduce critical skills required for properly understanding and quantifying capital structure changes from simple share repurchases to the extreme of a leveraged buyout. The techniques and concepts learned in building proper, robust, dynamic and flexible LBO models are highly valued given the relatively difficult nature of setting up, quantifying and articulating the complex relationships and intricacies of the LBO. We clearly convey the complexities involved in understanding the deal structure, sources & uses, refinancing options, credit ratios and the all-important debt sweep.


Last 10 posts

Valuation Summary - Private Company Differences
Hello. What differences are there in Valuation Summary for a private company vs. a public company (as shown on slide 14)?
Go to post added 6 years ago
Marginal Interest Rate (A/D Analysis example)
Where specifically do you get the Marginal Interest Rate (is it savings rate, or treasury?) from, especially in the current low interest rate environment?
Go to post added 7 years ago
NOL cap (due to M&A) affects "ALL FUTURE" NOLs?
In the tax schedule excel worksheet, NOL Used to Shelter Income (cell g13) formula takes the NOL cap per year if there is a change of control forward forever. So it appears that this “cap” affects all future (ending NOL) balances (and not just the acquired/historical target NOL portion)? Also i... Read More
Go to post added 9 years ago
Merger Modeling Basics: about the goodwill amortization
Hi, if there is no goodwill amortization, but under certain circumstances, the deal can be considered as asset deal , or can be applied the normal asset depreciation, even there is no amortization on goodwill in this case, I think you still have to incorporate the depreciation into the model, becaus... Read More
Go to post added 9 years ago
GAAP requirement to recognize all known liabilities
In the M&A module, when illustrating the different effective tax rates in the Pre-/Post-142/338 election scenarios, it is stated that GAAP requires all companies to recognize all known liabilities as soon as possible, hence why under a 338 election, the reported GAAP effective tax rate is lower ... Read More
Go to post added 9 years ago
Tax implications on Cash vs Stock deal
Do Stock deals enjoy a distinct financial advantage over cash deals due to U.S. tax policy (since stock-for-stock deals are not considered taxable events)? If so, what are the tax implications of stock vs. cash (besides the fact that cash clearly has forgone interest income or the interest expense f... Read More
Go to post added 9 years ago
Leveraged Buyout Overview: about goodwill
hello I am a little unclear about the accounting treatment. You mentioned the goodwill is the difference between the purchase price and the book value. But from my knowledge:if the M & A is viewed prospectively (restate everything and look forward) by treating the transaction as a purchase. ... Read More
Go to post added 9 years ago
Leveraged Buyout Overview: About LBO Overview
Hi there, As usual, I have a couple of questions/validations to make sure I fully understood the concepts here to move on to the Q&D Basic LBO Model course: (1). Is goodwill created only when when we purchase 100% of the target company? What's the relationship between GW creation and the %... Read More
Go to post added 9 years ago
Cost of Equity and Debt
How does the cost of equity of the target affect an LBO or investment decision? This is a private company and I know that publicly traded entities with the same risk characteristics have a cost of equity of 8.5%. I am wondering if it affects anything other than the initial standalone valuation used ... Read More
Go to post added 9 years ago
Quick & Dirty Basic LBO Model: Modeling Private Cos
In the Core Merger Modelling Topics module, the models you build concern public listed companies either as acquirors or as targets. What are the effects on a model when the target is a private (not listed company) or a Business Unit that a corporation wants to dispose. For example let's as... Read More
Go to post added 9 years ago