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Praise for Investment Banking, UNIVERSITY EDITION
"This book will surely become an indispensable guide to the art of buyout and M&A valuation, for the experienced investment practitioner as well as for the non-professional seeking to learn the mysteries of valuation."
--David M. Rubenstein, Co-Founder and Co-Executive Chairman, The Carlyle Group Host, The David Rubenstein Show: Peer to Peer Conversations
"The two Joshes present corporate finance in a broad, yet detailed framework for understanding valuation, balance sheets, and business combinations. As such, their book is an essential resource for understanding complex businesses and capital structures whether you are on the buy-side or sell-side."
--Mitchell R. Julis, Co-Chairman and Co-CEO, Canyon Partners, LLC
"Investment Banking provides a highly practical and relevant guide to the valuation analysis at the core of investment banking, private equity, and corporate finance. Mastery of these essential skills is fundamental for any role in transaction-related finance. This book will become a fixture on every finance professional's bookshelf."
--Thomas H. Lee, President, Lee Equity Partners, LLC Founder, Thomas H. Lee Capital Management, LLC
"As a pioneer in public equities, Nasdaq is excited to be partnering with Rosenbaum and Pearl on Investment Banking as they break new ground on content related to IPOs, direct listings, and SPACs. We recommend the book for any shareholder and senior executive looking to take a company public, as well as their bankers and lawyers."
--Adena Friedman, President and CEO, Nasdaq
"Investment Banking requires a skill set that combines both art and science. While numerous textbooks provide students with the core principles of financial economics, the rich institutional considerations that are essential on Wall Street are not well documented. This book represents an important step in filling this gap."
--Josh Lerner, Jacob H. Schiff Professor of Investment Banking, Harvard Business School Co-author, Venture Capital and Private Equity: A Casebook
"Valuation is the key to any transaction. Investment Banking provides specific step-by-step valuation procedures for LBO and M&A transactions, with lots of diagrams and numerical examples."
--Roger G. Ibbotson, Professor in the Practice of Finance, Yale School of Management Chairman and CIO, Zebra Capital Management, LLC Founder, Ibbotson Associates
"Investment Banking provides fresh insight and perspective to valuation analysis, the basis for every great trade and winning deal on Wall Street. The book is written from the perspective of practitioners, setting it apart from other texts."
--Gregory Zuckerman, Special Writer, The Wall Street Journal Author, The Greatest Trade Ever, The Frackers, and The Man Who Solved the Market
Also available from the authors:
Investment Banking WORKBOOK
Investment Banking FOCUS NOTES
Investment Banking ONLINE COURSE
www. efficientlearning. com/investment-banking
Praise for Investment Banking, UNIVERSITY EDITION
"This book will surely become an indispensable guide to the art of buyout and M&A valuation, for the experienced investment practitioner as well as for the non-professional seeking to learn the mysteries of valuation."
--David M. Rubenstein, Co-Founder and Co-Executive Chairman, The Carlyle Group Host, The David Rubenstein Show: Peer to Peer Conversations
"The two Joshes present corporate finance in a broad, yet detailed framework for understanding valuation, balance sheets, and business combinations. As such, their book is an essential resource for understanding complex businesses and capital structures whether you are on the buy-side or sell-side."
--Mitchell R. Julis, Co-Chairman and Co-CEO, Canyon Partners, LLC
"Investment Banking provides a highly practical and relevant guide to the valuation analysis at the core of investment banking, private equity, and corporate finance. Mastery of these essential skills is fundamental for any role in transaction-related finance. This book will become a fixture on every finance professional's bookshelf."
--Thomas H. Lee, President, Lee Equity Partners, LLC Founder, Thomas H. Lee Capital Management, LLC
"As a pioneer in public equities, Nasdaq is excited to be partnering with Rosenbaum and Pearl on Investment Banking as they break new ground on content related to IPOs, direct listings, and SPACs. We recommend the book for any shareholder and senior executive looking to take a company public, as well as their bankers and lawyers."
--Adena Friedman, President and CEO, Nasdaq
"Investment Banking requires a skill set that combines both art and science. While numerous textbooks provide students with the core principles of financial economics, the rich institutional considerations that are essential on Wall Street are not well documented. This book represents an important step in filling this gap."
--Josh Lerner, Jacob H. Schiff Professor of Investment Banking, Harvard Business School Co-author, Venture Capital and Private Equity: A Casebook
"Valuation is the key to any transaction. Investment Banking provides specific step-by-step valuation procedures for LBO and M&A transactions, with lots of diagrams and numerical examples."
--Roger G. Ibbotson, Professor in the Practice of Finance, Yale School of Management Chairman and CIO, Zebra Capital Management, LLC Founder, Ibbotson Associates
"Investment Banking provides fresh insight and perspective to valuation analysis, the basis for every great trade and winning deal on Wall Street. The book is written from the perspective of practitioners, setting it apart from other texts."
--Gregory Zuckerman, Special Writer, The Wall Street Journal Author, The Greatest Trade Ever, The Frackers, and The Man Who Solved the Market
Also available from the authors:
Investment Banking WORKBOOK
Investment Banking FOCUS NOTES
Investment Banking ONLINE COURSE
www. efficientlearning. com/investment-banking
Inhaltsverzeichnis
Instructor and Student Resources xv
About the Authors xix
About the Editors xxi
Foreword xxiii
Acknowledgments xxv
Disclaimer xxxiii
Introduction 1
Structure of the Book 3
Part One: Valuation (Chapters 1-3) 3
Part Two: Leveraged Buyouts (Chapters 4 & 5) 5
Part Three: Mergers & Acquisitions (Chapters 6 & 7) 6
Part Four: Initial Public Offerings (Chapters 8 & 9) 8
ValueCo Summary Financial Information 9
Part One Valuation 11
Chapter 1 Comparable Companies Analysis 13
Summary of Comparable Companies Analysis Steps 14
Step I. Select the Universe of Comparable Companies 17
Study the Target 17
Identify Key Characteristics of the Target for Comparison Purposes 18
Screen for Comparable Companies 22
Step II. Locate The Necessary Financial Information 23
SEC Filings: 10-K, 10-Q, 8-K, and Proxy Statement 24
Equity Research 25
Press Releases and News Runs 26
Financial Information Services 26
Summary of Financial Data Primary Sources 27
Step III. Spread Key Statistics, Ratios, and Trading Multiples 28
Calculation of Key Financial Statistics and Ratios 28
Supplemental Financial Concepts and Calculations 42
Calculation of Key Trading Multiples 47
Step IV. Benchmark the Comparable Companies 50
Benchmark the Financial Statistics and Ratios 50
Benchmark the Trading Multiples 50
Step V. Determine Valuation 51
Valuation Implied by EV/EBITDA 52
Valuation Implied by P/E 52
Key Pros and Cons 54
Illustrative Comparable Companies Analysis for ValueCo 55
Step I. Select the Universe of Comparable Companies 55
Step II. Locate the Necessary Financial Information 57
Step III. Spread Key Statistics, Ratios, and Trading Multiples 57
Step IV. Benchmark the Comparable Companies 69
Step V. Determine Valuation 74
Chapter 1 Questions 75
Chapter 2 Precedent Transactions Analysis 79
Summary of Precedent Transactions Analysis Steps 80
Step I. Select the Universe of Comparable Acquisitions 83
Screen for Comparable Acquisitions 83
Examine Other Considerations 84
Step II. Locate the Necessary Deal-Related and Financial Information 86
Public Targets 86
Private Targets 89
Summary of Primary SEC Filings in M&A Transactions 90
Step III. Spread Key Statistics, Ratios, and Transaction Multiples 92
Calculation of Key Financial Statistics and Ratios 92
Calculation of Key Transaction Multiples 98
Step IV. Benchmark the Comparable Acquisitions 102
Step V. Determine Valuation 102
Key Pros and Cons 103
Illustrative Precedent Transaction Analysis for ValueCo 104
Step I. Select the Universe of Comparable Acquisitions 104
Step II. Locate the Necessary Deal-Related and Financial Information 105
Step III. Spread Key Statistics, Ratios, and Transaction Multiples 107
Step IV. Benchmark the Comparable Acquisitions 115
Step V. Determine Valuation 117
Chapter 2 Questions 118
Chapter 3 Discounted Cash Flow Analysis 123
Summary of Discounted Cash Flow Analysis Steps 124
Step I. Study the Target and Determine Key Performance Drivers 128
Study the Target 128
Determine Key Performance Drivers 128
Step II. Project Free Cash Flow 129
Considerations for Projecting Free Cash Flow 129
Projection of Sales, EBITDA, and EBIT 131
Projection of Free Cash Flow 133
Step III. Calculate Weighted Average Cost of Capital 139
Step III(a): Determine Target Capital Structure 140
Step III(b): Estimate Cost of Debt (r d) 141
Step III(c): Estimate Cost of Equity (r e) 142
Step III(d): Calculate WACC 146
Step IV. Determine Terminal Value 146
Exit Multiple Method 147
Perpetuity Growth Method 147
Step V. Calculate Present Value and Determine Valuation 149
Calculate Present Value 149
Determine Valuation 151
Perform Sensitivity Analysis 153
Key Pros and Cons 154
Illustrative Discounted Cash Flow Analysis for ValueCo 155
Step I. Study the Target and Determine Key Performance Drivers 155
Step II. Project Free Cash Flow 155
Projection of Sales, EBITDA, and EBIT 157
Step III. Calculate Weighted Average Cost of Capital 162
Step IV. Determine Terminal Value 167
Step V. Calculate Present Value and Determine Valuation 169
Chapter 3 Questions 174
Part Two Leveraged Buyouts 179
Chapter 4 Leveraged Buyouts 181
Key Participants 183
Financial Sponsors 183
Investment Banks 184
Bank and Institutional Lenders 186
Bond Investors 187
Private Credit Funds 188
Target Management 188
Characteristics of a Strong LBO Candidate 189
Strong Cash Flow Generation 190
Leading and Defensible Market Positions 190
Growth Opportunities 190
Efficiency Enhancement Opportunities 191
Low Capex Requirements 191
Strong Asset Base 192
Proven Management Team 192
Economics of LBOs 193
Returns Analysis-Internal Rate of Return 193
Returns Analysis-Cash Return 194
How LBOs Generate Returns 194
How Leverage Is Used to Enhance Returns 196
Primary Exit/Monetization Strategies 199
Sale of Business 199
Initial Public Offering 200
Dividends / Dividend Recapitalization 200
Below Par Debt Repurchase 200
LBO Financing: Structure 201
LBO Financing: Primary Sources 204
Secured Debt 204
High Yield Bonds 208
Mezzanine Debt 210
Equity Contribution 211
LBO Financing: Selected Key Terms 214
Security 214
Seniority 214
Maturity 215
Coupon 216
Call Protection 217
Covenants 218
Term Sheets 221
LBO Financing: Determining Financing Structure 224
Chapter 4 Questions 229
Chapter 5 LBO Analysis 233
Financing Structure 233
Valuation 234
Step I. Locate and Analyze the Necessary Information 236
Step II. Build the Pre-LBO Model 236
Step II(a): Build Historical and Projected Income Statement through EBIT 237
Step II(b): Input Opening Balance Sheet and Project Balance Sheet Items 240
Step II(c): Build Cash Flow Statement through Investing Activities 242
Operating Activities 242
Step III. Input Transaction Structure 245
Step III(a): Enter Purchase Price Assumptions 245
Step III(b): Enter Financing Structure into Sources and Uses 247
Step III(c): Link Sources and Uses to Balance Sheet Adjustments Columns 248
Uses of Funds Links 251
Step IV. Complete the Post-LBO Model 254
Step IV(a): Build Debt Schedule 254
Step IV(b): Complete Pro Forma Income Statement from EBIT to Net Income 263
Step IV(c): Complete Pro Forma Balance Sheet 266
Step IV(d): Complete Pro Forma Cash Flow Statement 268
Step V. Perform LBO Analysis 270
Step V(a): Analyze Financing Structure 270
Step V(b): Perform Returns Analysis 272
Step V(c): Determine Valuation 276
Step V(d): Create Transaction Summary Page 277
Illustrative LBO Analysis for ValueCo 278
Chapter 5 Questions 288
Part Three Mergers & Acquisitions 293
Chapter 6 Sell-Side M&A 295
Auctions 296
Auction Structure 299
Organization and Preparation 299
Identify Seller Objectives and Determine Appropriate Sale Process 299
Perform Sell-Side Advisor Due Diligence and Preliminary Valuation Analysis 301
Select Buyer Universe 301
Prepare Marketing Materials 302
Prepare Confidentiality Agreement 305
First Round 306
Contact Prospective Buyers 306
Negotiate and Execute Confidentiality Agreement with Interested Parties 306
Distribute Confidential Information Memorandum and Initial Bid Procedures Letter 307
Prepare Management Presentation 308
Set Up Data Room 309
Prepare Stapled Financing Package (if applicable) 311
Receive Initial Bids and Select Buyers to Proceed to Second Round 311
Second Round 313
Conduct Management Presentations 313
Facilitate Site Visits 314
Provide Data Room Access and Respond to Diligence Requests 314
Distribute Final Bid Procedures Letter and Draft Definitive Agreement 315
Receive Final Bids 316
Negotiations 320
Evaluate Final Bids 320
Negotiate with Preferred Buyer(s) 320
Select Winning Bidder 320
Render Fairness Opinion (if required) 321
Receive Board/Owner Approval and Execute Definitive Agreement 321
Closing 322
Obtain Necessary Approvals 322
Shareholder Approval 323
Financing and Closing 325
Negotiated Sale 326
Chapter 6 Questions 328
Chapter 7 Buy-Side M&A 331
Buyer Motivation 332
Synergies 333
Cost Synergies 334
Revenue Synergies 334
Acquisition Strategies 335
Horizontal Integration 335
Vertical Integration 335
Conglomeration 336
Form of Financing 337
Cash on Hand 338
Debt Financing 338
Equity Financing 339
Debt vs. Equity Financing Summary-Acquirer Perspective 340
Deal Structure 340
Stock Sale 340
Asset Sale 343
Stock Sales Treated as Asset Sales for Tax Purposes 346
Buy-Side Valuation 349
Football Field 349
Analysis at Various Prices 352
Contribution Analysis 353
Merger Consequences Analysis 355
Purchase Price Assumptions 355
Balance Sheet Effects 360
Accretion/(Dilution) Analysis 365
Acquisition Scenarios-I) 50% Stock/50% Cash; II) 100% Cash; and III) 100% Stock 368
Illustrative Merger Consequences Analysis for the BuyerCo / ValueCo Transaction 373
Chapter 7 Questions 394
Part Four Initial Public Offerings 399
Chapter 8 Initial Public Offerings 401
Why Do Companies Go Public? 402
Characteristics of a Strong IPO Candidate 404
Attractive Industry 404
Strong Competitive Position 404
Growth Opportunities 405
Moat & Barriers to Entry 406
Healthy Financial Profile 406
Disruptive & Differentiated Solutions 407
Favorable Risk Profile 407
Proven Management Team 408
Key Participants 409
Investment Banks 409
Company Management 412
Current Owners / Investors 413
IPO Investors 413
Lawyers 414
Accountants 414
Exchange Partner 415
IPO Advisors 416
Vendors 416
Selected Key Terms 417
Offering Size 418
Primary / Secondary 419
Overallotment Option, a. k. a. "Greenshoe" 420
Syndicate Structure 421
Lock-up Provision 422
Listing Exchange 422
Gross Spread 423
Dual-Track Process 424
Special Purpose Acquisition Companies (SPACs) 427
Direct Listings 429
Post-IPO Equity Offerings 432
IPO Considerations 433
Chapter 8 Questions 435
Nasdaq Appendix 439
Chapter 9 The IPO Process 443
Organization and Preparation 445
Select IPO Team, Exchange Partner, and Assign Responsibilities 445
Manage Corporate Housekeeping 448
c corp vs. Up-c Structure 453
Determine IPO Timing 455
Determine Offering Structure and Preliminary IPO Valuation 456
Host Organizational Meeting 459
Due Diligence, Drafting, and Filing 460
Perform Underwriter Due Diligence 460
Draft and File the Registration Statement 461
Prepare Other Key Transaction and Corporate Governance Documents 466
Coordinate with Equity Research 467
Respond to SEC Comments and File Amended Registration Statement 467
Marketing and Roadshow 468
Prepare Marketing Materials 468
Salesforce Teach-in 469
Conduct Roadshow 470
Build Order Book 473
Pricing and Allocation 475
Price the Offering 475
Allocate Shares to Investors 477
Closing 477
Chapter 9 Questions 479
Solutions to Selected Questions 485
Afterword 513
Bibliography and Recommended Reading 515
Index 521
About the Authors xix
About the Editors xxi
Foreword xxiii
Acknowledgments xxv
Disclaimer xxxiii
Introduction 1
Structure of the Book 3
Part One: Valuation (Chapters 1-3) 3
Part Two: Leveraged Buyouts (Chapters 4 & 5) 5
Part Three: Mergers & Acquisitions (Chapters 6 & 7) 6
Part Four: Initial Public Offerings (Chapters 8 & 9) 8
ValueCo Summary Financial Information 9
Part One Valuation 11
Chapter 1 Comparable Companies Analysis 13
Summary of Comparable Companies Analysis Steps 14
Step I. Select the Universe of Comparable Companies 17
Study the Target 17
Identify Key Characteristics of the Target for Comparison Purposes 18
Screen for Comparable Companies 22
Step II. Locate The Necessary Financial Information 23
SEC Filings: 10-K, 10-Q, 8-K, and Proxy Statement 24
Equity Research 25
Press Releases and News Runs 26
Financial Information Services 26
Summary of Financial Data Primary Sources 27
Step III. Spread Key Statistics, Ratios, and Trading Multiples 28
Calculation of Key Financial Statistics and Ratios 28
Supplemental Financial Concepts and Calculations 42
Calculation of Key Trading Multiples 47
Step IV. Benchmark the Comparable Companies 50
Benchmark the Financial Statistics and Ratios 50
Benchmark the Trading Multiples 50
Step V. Determine Valuation 51
Valuation Implied by EV/EBITDA 52
Valuation Implied by P/E 52
Key Pros and Cons 54
Illustrative Comparable Companies Analysis for ValueCo 55
Step I. Select the Universe of Comparable Companies 55
Step II. Locate the Necessary Financial Information 57
Step III. Spread Key Statistics, Ratios, and Trading Multiples 57
Step IV. Benchmark the Comparable Companies 69
Step V. Determine Valuation 74
Chapter 1 Questions 75
Chapter 2 Precedent Transactions Analysis 79
Summary of Precedent Transactions Analysis Steps 80
Step I. Select the Universe of Comparable Acquisitions 83
Screen for Comparable Acquisitions 83
Examine Other Considerations 84
Step II. Locate the Necessary Deal-Related and Financial Information 86
Public Targets 86
Private Targets 89
Summary of Primary SEC Filings in M&A Transactions 90
Step III. Spread Key Statistics, Ratios, and Transaction Multiples 92
Calculation of Key Financial Statistics and Ratios 92
Calculation of Key Transaction Multiples 98
Step IV. Benchmark the Comparable Acquisitions 102
Step V. Determine Valuation 102
Key Pros and Cons 103
Illustrative Precedent Transaction Analysis for ValueCo 104
Step I. Select the Universe of Comparable Acquisitions 104
Step II. Locate the Necessary Deal-Related and Financial Information 105
Step III. Spread Key Statistics, Ratios, and Transaction Multiples 107
Step IV. Benchmark the Comparable Acquisitions 115
Step V. Determine Valuation 117
Chapter 2 Questions 118
Chapter 3 Discounted Cash Flow Analysis 123
Summary of Discounted Cash Flow Analysis Steps 124
Step I. Study the Target and Determine Key Performance Drivers 128
Study the Target 128
Determine Key Performance Drivers 128
Step II. Project Free Cash Flow 129
Considerations for Projecting Free Cash Flow 129
Projection of Sales, EBITDA, and EBIT 131
Projection of Free Cash Flow 133
Step III. Calculate Weighted Average Cost of Capital 139
Step III(a): Determine Target Capital Structure 140
Step III(b): Estimate Cost of Debt (r d) 141
Step III(c): Estimate Cost of Equity (r e) 142
Step III(d): Calculate WACC 146
Step IV. Determine Terminal Value 146
Exit Multiple Method 147
Perpetuity Growth Method 147
Step V. Calculate Present Value and Determine Valuation 149
Calculate Present Value 149
Determine Valuation 151
Perform Sensitivity Analysis 153
Key Pros and Cons 154
Illustrative Discounted Cash Flow Analysis for ValueCo 155
Step I. Study the Target and Determine Key Performance Drivers 155
Step II. Project Free Cash Flow 155
Projection of Sales, EBITDA, and EBIT 157
Step III. Calculate Weighted Average Cost of Capital 162
Step IV. Determine Terminal Value 167
Step V. Calculate Present Value and Determine Valuation 169
Chapter 3 Questions 174
Part Two Leveraged Buyouts 179
Chapter 4 Leveraged Buyouts 181
Key Participants 183
Financial Sponsors 183
Investment Banks 184
Bank and Institutional Lenders 186
Bond Investors 187
Private Credit Funds 188
Target Management 188
Characteristics of a Strong LBO Candidate 189
Strong Cash Flow Generation 190
Leading and Defensible Market Positions 190
Growth Opportunities 190
Efficiency Enhancement Opportunities 191
Low Capex Requirements 191
Strong Asset Base 192
Proven Management Team 192
Economics of LBOs 193
Returns Analysis-Internal Rate of Return 193
Returns Analysis-Cash Return 194
How LBOs Generate Returns 194
How Leverage Is Used to Enhance Returns 196
Primary Exit/Monetization Strategies 199
Sale of Business 199
Initial Public Offering 200
Dividends / Dividend Recapitalization 200
Below Par Debt Repurchase 200
LBO Financing: Structure 201
LBO Financing: Primary Sources 204
Secured Debt 204
High Yield Bonds 208
Mezzanine Debt 210
Equity Contribution 211
LBO Financing: Selected Key Terms 214
Security 214
Seniority 214
Maturity 215
Coupon 216
Call Protection 217
Covenants 218
Term Sheets 221
LBO Financing: Determining Financing Structure 224
Chapter 4 Questions 229
Chapter 5 LBO Analysis 233
Financing Structure 233
Valuation 234
Step I. Locate and Analyze the Necessary Information 236
Step II. Build the Pre-LBO Model 236
Step II(a): Build Historical and Projected Income Statement through EBIT 237
Step II(b): Input Opening Balance Sheet and Project Balance Sheet Items 240
Step II(c): Build Cash Flow Statement through Investing Activities 242
Operating Activities 242
Step III. Input Transaction Structure 245
Step III(a): Enter Purchase Price Assumptions 245
Step III(b): Enter Financing Structure into Sources and Uses 247
Step III(c): Link Sources and Uses to Balance Sheet Adjustments Columns 248
Uses of Funds Links 251
Step IV. Complete the Post-LBO Model 254
Step IV(a): Build Debt Schedule 254
Step IV(b): Complete Pro Forma Income Statement from EBIT to Net Income 263
Step IV(c): Complete Pro Forma Balance Sheet 266
Step IV(d): Complete Pro Forma Cash Flow Statement 268
Step V. Perform LBO Analysis 270
Step V(a): Analyze Financing Structure 270
Step V(b): Perform Returns Analysis 272
Step V(c): Determine Valuation 276
Step V(d): Create Transaction Summary Page 277
Illustrative LBO Analysis for ValueCo 278
Chapter 5 Questions 288
Part Three Mergers & Acquisitions 293
Chapter 6 Sell-Side M&A 295
Auctions 296
Auction Structure 299
Organization and Preparation 299
Identify Seller Objectives and Determine Appropriate Sale Process 299
Perform Sell-Side Advisor Due Diligence and Preliminary Valuation Analysis 301
Select Buyer Universe 301
Prepare Marketing Materials 302
Prepare Confidentiality Agreement 305
First Round 306
Contact Prospective Buyers 306
Negotiate and Execute Confidentiality Agreement with Interested Parties 306
Distribute Confidential Information Memorandum and Initial Bid Procedures Letter 307
Prepare Management Presentation 308
Set Up Data Room 309
Prepare Stapled Financing Package (if applicable) 311
Receive Initial Bids and Select Buyers to Proceed to Second Round 311
Second Round 313
Conduct Management Presentations 313
Facilitate Site Visits 314
Provide Data Room Access and Respond to Diligence Requests 314
Distribute Final Bid Procedures Letter and Draft Definitive Agreement 315
Receive Final Bids 316
Negotiations 320
Evaluate Final Bids 320
Negotiate with Preferred Buyer(s) 320
Select Winning Bidder 320
Render Fairness Opinion (if required) 321
Receive Board/Owner Approval and Execute Definitive Agreement 321
Closing 322
Obtain Necessary Approvals 322
Shareholder Approval 323
Financing and Closing 325
Negotiated Sale 326
Chapter 6 Questions 328
Chapter 7 Buy-Side M&A 331
Buyer Motivation 332
Synergies 333
Cost Synergies 334
Revenue Synergies 334
Acquisition Strategies 335
Horizontal Integration 335
Vertical Integration 335
Conglomeration 336
Form of Financing 337
Cash on Hand 338
Debt Financing 338
Equity Financing 339
Debt vs. Equity Financing Summary-Acquirer Perspective 340
Deal Structure 340
Stock Sale 340
Asset Sale 343
Stock Sales Treated as Asset Sales for Tax Purposes 346
Buy-Side Valuation 349
Football Field 349
Analysis at Various Prices 352
Contribution Analysis 353
Merger Consequences Analysis 355
Purchase Price Assumptions 355
Balance Sheet Effects 360
Accretion/(Dilution) Analysis 365
Acquisition Scenarios-I) 50% Stock/50% Cash; II) 100% Cash; and III) 100% Stock 368
Illustrative Merger Consequences Analysis for the BuyerCo / ValueCo Transaction 373
Chapter 7 Questions 394
Part Four Initial Public Offerings 399
Chapter 8 Initial Public Offerings 401
Why Do Companies Go Public? 402
Characteristics of a Strong IPO Candidate 404
Attractive Industry 404
Strong Competitive Position 404
Growth Opportunities 405
Moat & Barriers to Entry 406
Healthy Financial Profile 406
Disruptive & Differentiated Solutions 407
Favorable Risk Profile 407
Proven Management Team 408
Key Participants 409
Investment Banks 409
Company Management 412
Current Owners / Investors 413
IPO Investors 413
Lawyers 414
Accountants 414
Exchange Partner 415
IPO Advisors 416
Vendors 416
Selected Key Terms 417
Offering Size 418
Primary / Secondary 419
Overallotment Option, a. k. a. "Greenshoe" 420
Syndicate Structure 421
Lock-up Provision 422
Listing Exchange 422
Gross Spread 423
Dual-Track Process 424
Special Purpose Acquisition Companies (SPACs) 427
Direct Listings 429
Post-IPO Equity Offerings 432
IPO Considerations 433
Chapter 8 Questions 435
Nasdaq Appendix 439
Chapter 9 The IPO Process 443
Organization and Preparation 445
Select IPO Team, Exchange Partner, and Assign Responsibilities 445
Manage Corporate Housekeeping 448
c corp vs. Up-c Structure 453
Determine IPO Timing 455
Determine Offering Structure and Preliminary IPO Valuation 456
Host Organizational Meeting 459
Due Diligence, Drafting, and Filing 460
Perform Underwriter Due Diligence 460
Draft and File the Registration Statement 461
Prepare Other Key Transaction and Corporate Governance Documents 466
Coordinate with Equity Research 467
Respond to SEC Comments and File Amended Registration Statement 467
Marketing and Roadshow 468
Prepare Marketing Materials 468
Salesforce Teach-in 469
Conduct Roadshow 470
Build Order Book 473
Pricing and Allocation 475
Price the Offering 475
Allocate Shares to Investors 477
Closing 477
Chapter 9 Questions 479
Solutions to Selected Questions 485
Afterword 513
Bibliography and Recommended Reading 515
Index 521
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Produktdetails
Erscheinungsdatum
07. Juli 2021
Sprache
englisch
Auflage
3rd edition
Seitenanzahl
576
Reihe
Wiley Finance Editions
Autor/Autorin
Joshua Rosenbaum, Joshua Pearl
Verlag/Hersteller
Produktart
kartoniert
Gewicht
1158 g
Größe (L/B/H)
252/176/26 mm
ISBN
9781119823377
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