Leveraged Buyouts, and Mergers & Acquisitions
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Content Part 1: Mergers & Acquisitions (M&A)
Content Endorsements V Preface VII Authors IX Part 1: Mergers & Acquisitions (M&A) Chapter 1: Why Mergers&Acquisitions? 1.1 The Term "Mergers & Acquisitions" 1 1.1.1 Mergers 2 1.1.2 Acquisitions 6 1.1.3 M&A and business alliances 6 1.1.3.1 Forms of business alliances 6 1.1.3.2 M&A versus business alliances 9 1.2 Reasons for and success factors of M&A 10 1.3 M&A of listed companies 13 1.3.1 Challenges for listed companies 13 1.3.1.1 Increased public perception 13 1.3.1.2 Shareholder structure 14 1.3.1.3 The target company's share price as an uncertainty factor 14 1.3.1.4 The bidder company's share price as an uncertainty factor 15 1.3.2 Legal characteristics 16 1.3.2.1 The regulations of § 93 AktG 16 1.3.2.2 The regulations of § 15 WpÜG 16 1.3.2.3 The regulations off 21 WpHG 16 1.3.3 Takeover regulations 16 1.3.3.1 Overview of the "Wertpapiererwerbs- und Übernahmegesetz" (WpÜG) (Security Purchase and Takeover Act) 17 1.3.3.2 The bid process according to the WpÜG 18 1.3.3.3 Squeeze out 20 1.4 The process of M&A 21 Chapter 2: Initial Phase (Phase 1) 2.1 Pitch 23 2.2 Choice of process 25 2.2.1 The discrete approach 25 2.2.2 Simultaneous bilateral negotiations 25 2.2.3 Controlled competitive auction 25 2.2.4 Full public auction 25 2.3 Candidate screening and selection 27 2.3.1 MBO or MBI 28 Bibliografische Informationen digitalisiert durch http://d-nb.info/997693088 XII Content 2.3.2 Financial investors 29 2.3.3 Strategie investors 30 2.4 Advisers 32 2.4.1 Investment banks 32 2.4.2 Accountants and tax advisers 33 2.4.3 Lawyers 34 2.4.4 Other -
The-Single-Family-Office-Book.Pdf
i Family Office Help Line: (212) 729-5067 THE SINGLE FAMILY OFFICE Creating, Operating & Managing Investments of a Single Family Office By Richard C. Wilson Billionaire Family Office | Family Offices Group Association ii iii Family Office Help Line: (212) 729-5067 This book is dedicated to my amazing daughters Bella & Maya Wilson. iv v Family Office Help Line: (212) 729-5067 Table of Contents Chapter Page Preface 5 Part 1: Single Family Office Fundamentals 7 Chapter 1: Introduction to Single Family Offices 9 Chapter 2: Single Family Office Talent & Teams 17 Chapter 3: Single Family Office Operations 35 Chapter 4: Single Family Office Governance 47 Part 2: Starting a Single Family Office 59 Chapter 5: Creating Your Family Compass 61 Chapter 6: Starting a Single Family Office 69 Chapter 7: Partners, Vendors, & Service Providers 87 Chapter 8: Investment Committees & Advisory Boards 93 Part 3: Single Family Office Investment Portfolios 109 Chapter 9: Family Office Investment Management 111 Chapter 10: Investment Fund Manager Selection & Monitoring 113 Chapter 11: Direct Investing & Operating Businesses 131 Chapter 12: Co-Investing & Club Deals 171 Chapter 13: Real Estate Investments and Hard Assets 191 Part 4: Single Family Office Best Practices & Models to Emulate 205 Chapter 14: $1 Billion+ Single Family Offices 207 Chapter 15: Intergenerational Money Management 227 Chapter 16: Converting from a Single Family Office into a Multi-Family Office 233 Chapter 17: Outsourced Chief Investment Officers 243 Chapter 18: Virtual Family Offices 247 Chapter 19: The Future of the Single Family Office Industry 261 vi vii Acknowledgements The Single Family Office book would not have been possible to write without the help of many smart and dedicated professionals. -
Valuations for Re-Organisations
VALUATIONS FOR RE-ORGANISATIONS CA VIKRAM JAIN 04 MAY 2019 VALUATION CONCEPTS & PURPOSE CA VIKRAM JAIN 2 VALUATION CONCEPTS Value - Price Value varies Not an with Exact Situation science Valuation More of an Subjective Art Date Specific CA VIKRAM JAIN 3 TYPES OF ASSETS Others Securities • Jewellery or Intangible Land and Plant and • Archaeological Business Collections Financial Assets Building Machinery • Drawings Assets • Paintings • Sculptures CA VIKRAM JAIN 4 PURPOSE OF VALUATION Business Valuation Regulatory Intangibles Financial Reporting Purchase Price Restructuring FEMA Purchase / Sale Allocation Purchase / Sale of Private Equity/ Income Tax Act Hypothecation shares / business Venture Capital Funds Litigation / Family Accounting for SEBI Regulations Financial Instruments Settlements purchase Ind AS reporting – Fair Fund raising Companies Act Impairment Value / Impairment CA VIKRAM JAIN 5 PROCESS OF VALUATION CA VIKRAM JAIN 6 STEPS IN VALUATION 1 2 3 4 Information Analysis Valuation Recommendation • Obtaining information • Data Analysis and review Methodologies • Assigning Weights • Business Understanding • Discussion with the • Selection of method • Recommendation Management • Conducting sensitivity • Reporting analysis CA VIKRAM JAIN 7 SOURCES OF INFORMATION Historical data such as audited results of the Company Industry & Company overview Future projections Management Discussion Stock market quotations / announcements Publicly available data on comparable companies Market surveys, news paper reports Representation by Management -
Economic Value Added in Banks and Development Financial Institutions
Economic Value Added in Banks and Development Financial Institutions Ashok Thampy* and Rajiv Baheti** * Assistant Professor, Finance and Control Area, Indian Institute of Management Bangalore, Bannerghatta Road, Bangalore 560076 e-mail: [email protected] **Post Graduate Programme in Management, 2nd Year, Indian Institute of Management Bangalore, Bannerghatta Road, Bangalore 560076 e-mail: [email protected] Economic Value Added In Banks and Development Financial Institutions By Ashok Thampy Rajiv Baheti* January 2000 Please address all correspondence to: Prof. Ashok Thampy Assistant Professor Indian Institute of Management Bannerghatta Road Bangalore - 560 076 India Fax: (080) 6644050 * Second Year Student of the Post Graduate Programme at IIMB Copies of the Working Papers may be obtained from the FPM & Research Office Economic value added in banks and de\>elopmental financial institutions 1. INTRODUCTION Shareholder wealth maximization is now widely considered to be the main objective of the management of firms. Countless firms have affirmed their commitment to shareholder wealth and several managers have fallen for not giving adequate importance to it. Of the companies that have been most successful at increasing shareholder wealth as measured by consistent improvements in the return from the stocks, an increasingly common factor is their use of the concept of economic profit as a measure of performance. Economic profit or economic value added (EVA) has become a popular tool for managers to measure performance and for guiding investment decisions. Adherents of EVA can be found among several of the world's leading companies. Among banks, Loyds TSB of the UK has used the principle of economic profits to become one of the most valuable banks in the world. -
Fundamental Analysis and Discounted Free Cash Flow Valuation of Stocks at Macedonian Stock Exchange
Ivanovska, Nadica, Zoran Ivanovski, and Zoran Narasanov. 2014. Fundamental Analysis and Discounted Free Cash Flow Valuation of Stocks at Macedonian Stock Exchange. UTMS Journal of Economics 5 (1): 11–24. Preliminary communication (accepted February 24, 2014) FUNDAMENTAL ANALYSIS AND DISCOUNTED FREE CASH FLOW VALUATION OF STOCKS AT MACEDONIAN STOCK EXCHANGE Nadica Ivanovska1 Zoran Ivanovski Zoran Narasanov Abstract: We examine the valuation performance of Discounted Free Cash Flow Model (DFCF) at the Macedonian Stock Exchange (MSE) in order to determine if this model offer significant level of accuracy and relevancy for stock values determination. We find that stock values calculated with DCF model are very close to average market prices which suggests that market prices oscillate near their fundamental values. We can conclude that DFCF models are useful tools for the companies’ enterprise values calculation on long term. The analysis of our results derived from stock valuation with DFCF model as well as comparison with average market stock prices suggest that discounted cash flow model is relatively reliable valuation tool that have to be used for stocks analyses at MSE. Keywords: valuation, securities, free cash flow, equity, stock-exchange. Jel Classification: G1,G12 INTRODUCTION Valuation of an asset can be determined on three ways. First, as the intrinsic value of the asset, based on its capacity to generate cash flows in the future. Second, as a relative value, by examining how the market is pricing similar or comparable assets. Finally, we can value assets with cash flows that are contingent on the occurrence of a specific event as options (Damodaran 2006). -
Residual Income Valuation
CHAPTER 5 RESIDUAL INCOME VALUATION LEARNING OUTCOMES After completing this chapter, you will be able to do the following : • Calculate and interpret residual income and related measures (e.g., economic value added and market value added). • Discuss the use of residual income models. • Calculate future values of residual income given current book value, earnings growth estimates, and an assumed dividend payout ratio. • Calculate the intrinsic value of a share of common stock using the residual income model. • Discuss the fundamental determinants or drivers of residual income. • Explain the relationship between residual income valuation and the justifi ed price - to - book ratio based on forecasted fundamentals. • Calculate and interpret the intrinsic value of a share of common stock using a single - stage (constant - growth) residual income model. • Calculate an implied growth rate in residual income given the market price - to - book ratio and an estimate of the required rate of return on equity. • Explain continuing residual income and list the common assumptions regarding continuing residual income. • Justify an estimate of continuing residual income at the forecast horizon given company and industry prospects. • Calculate and interpret the intrinsic value of a share of common stock using a multistage residual income model, given the required rate of return, forecasted earnings per share over a fi nite horizon, and forecasted continuing residual earnings. • Explain the relationship of the residual income model to the dividend discount and free cash fl ow to equity models. • Contrast the recognition of value in the residual income model to value recognition in other present value models. • Discuss the strengths and weaknesses of the residual income model. -
The Effect of Economic Value Added and Earning Per Share to Stocks Return (Panel Data Approachment)
International Journal of Business and Management Invention ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X www.ijbmi.org || Volume 5 Issue 2 || February. 2016 || PP-08-15 The Effect Of Economic Value Added And Earning Per Share To Stocks Return (Panel Data Approachment) 1Rafrini Amyulianthy, 2Elsa K.Ritonga 1,2Faculty of Economic and Business University of Pancasila, Indonesia ABSTRACT : The purpose of this study is to examine the effect of Economic Value Added (EVA) and Earning per Share (EPS) on stocks return. This study was taken because there are still differences between the research study with each other. This research was conducted using secondary data. Population in this research was a with time company incorporated in the index LQ 45 in Indonesian Stock Exchange period 2013-2014. Sampling technique using was purposive sampling. There are 21 companies to analyzed. This study using multiple regression with panel data. Results shows that Economic Value Added (EVA) have positive significant effect on Stock Return, while Earning Per Share (EPS) also have positive significant on Stock Return. Adjusted R Square value was 0,395091 means 39,50% can explained by the independent variable, while 60,50% are influenced by the other variables which have not been included in the research model. Keywords : Stocks Return, Economic Value Added, Earning Per Share, Multiple Regression, Panel Data I. INTRODUCTION In the era of free market economy, an increasingly competitive business world, so that requires companies to be able to adapt in order to avoid bankruptcy and ahead of the competition. One of the important information from the financial statements that are often used by investors as a major determinant of investment decisions is the company's performance. -
Mogul Studios | White Paper V0.9 Mogul Studios | White Paper V0.9
mogul Mogul Studios | White Paper V0.9 Mogul Studios | White Paper V0.9 MOGUL STUDIOS Liquid Film Financing White Paper v0.9 [email protected] mogul mogulstudios.com | 2 Mogul Studios | White Paper V0.9 Disclaimer The introduction and description of the basic condition of the project in this document is an invitation to the general public. It is not and cannot be regarded as an investment or declaration of commitment to any specific or unspecified subject. It is neither nor can it be considered as a specific team’s project. It’s not a commitment nor a guarantee. The Mogul team reserves all rights to modify, delete, add, abrogate, and interpret related behaviors of this document. Those who have the intention to participate, invest, and cooperate in this project must clearly understand the full risks of this project. Participants shall enter into a written cooperation agreement for participation in this project. The cooperation agreement shall clearly and completely indicate the cooperation, participation or investment. Participants should indicate in written or verbal form that they have fully understood and accepted all the risks that the project has generated or may have, and take corresponding responsibility. mogul mogulstudios.com | 3 Mogul Studios | White Paper V0.9 Mogul will also help optimize the film funding and production process Executive by enhancing financial transparency at every level. No longer will it be possible for filmmakers to hide exorbitant expenses behind the black Summary box of “Hollywood accounting.” Now, investors can ensure things are The movie business has always been done right, with their interests as about making dreams come true -- investors and film fans are always not just the dreams of viewers in considered first. -
Real Options Valuation As a Way to More Accurately Estimate the Required Inputs to DCF
Northwestern University Kellogg Graduate School of Management Finance 924-A Professor Petersen Real Options Spring 2001 Valuation is at the foundation of almost all finance courses and the intellectual foundation of most valuation methods which we will examine is discounted cashflow. In Finance I you used DCF to value securities and in Finance II you used DCF to value projects. The valuation approach in Futures and Options appeared to be different, but was conceptually very similar. This course is meant to expand your knowledge of valuation – both the intuition of how it should be done as well as the practice of how it is done. Understanding when the two are the same and when they are not can be very valuable. Prerequisites: The prerequisite for this course is Finance II (441)/Turbo (440) and Futures and Options (465). Given the structure of the course, no auditors will be allowed. Course Readings: Course Packet for Finance 924 - Petersen Warning: This is a relatively new course. Thus you should expect that the content and organization of the course will be fluid and may change in real time. I reserve the right to add and alter the course materials during the term. I understand that this makes organization challenging. You need to keep on top of where we are and what requirements are coming. If you are ever unsure, ASK. I will keep you informed of the schedule via the course web page. You should check it each week to see what we will cover the next week and what assignments are due. -
Uva-F-1274 Methods of Valuation for Mergers And
Graduate School of Business Administration UVA-F-1274 University of Virginia METHODS OF VALUATION FOR MERGERS AND ACQUISITIONS This note addresses the methods used to value companies in a merger and acquisitions (M&A) setting. It provides a detailed description of the discounted cash flow (DCF) approach and reviews other methods of valuation, such as book value, liquidation value, replacement cost, market value, trading multiples of peer firms, and comparable transaction multiples. Discounted Cash Flow Method Overview The discounted cash flow approach in an M&A setting attempts to determine the value of the company (or ‘enterprise’) by computing the present value of cash flows over the life of the company.1 Since a corporation is assumed to have infinite life, the analysis is broken into two parts: a forecast period and a terminal value. In the forecast period, explicit forecasts of free cash flow must be developed that incorporate the economic benefits and costs of the transaction. Ideally, the forecast period should equate with the interval in which the firm enjoys a competitive advantage (i.e., the circumstances where expected returns exceed required returns.) For most circumstances a forecast period of five or ten years is used. The value of the company derived from free cash flows arising after the forecast period is captured by a terminal value. Terminal value is estimated in the last year of the forecast period and capitalizes the present value of all future cash flows beyond the forecast period. The terminal region cash flows are projected under a steady state assumption that the firm enjoys no opportunities for abnormal growth or that expected returns equal required returns in this interval. -
Mezzanine Finance White Paper 2Nd Edition
Mezzanine Finance White Paper 2nd Edition Corry Silbernagel Davis Vaitkunas Amendments to Mezzanine Capital Structures section with Ian Giddy, NYU Stern School of Business, 2012 Copyright © 2003-2018 Bond Capital Mezzanine Inc. - All rights reserved. 1730 - 1111 West Georgia Street Vancouver, BC Canada V6E 4M3 T 604.687.2663 www.bondcapital.ca MEZZANINE FINANCE Mezzanine investments are tailored investments that bring the preferred features of both debt and equity into a single facility. Mezzanine investors are often non-bank institutions and specialty funds seeking absolute return on capital. Mezzanine facilities are customized to the specific cash flow need of the investee Companies that use company, which not only helps the investee company mezzanine capital get more senior debt capital, but may also reduce the access more capital need for equity and thus dilution to the shareholders. and can achieve higher Common transactions that use mezzanine facilities include growth through expansion projects, acquisitions, returns on equity. recapitalizations, management buyouts, and leveraged buyouts. Companies that use mezzanine capital access more capital and can achieve higher returns on equity. The availability of mezzanine capital can be cyclical, while the amount used in any transaction is influenced by market leverage profiles and the availability of senior debt and equity sources. The pricing of a combination of senior debt and mezzanine debt can be comparable to that of a high yield note. Most mezzanine investments are repaid through cash generated by the business, a change-of-control sale or recapitalization of the company. 2 Mezzanine Finance White Paper Copyright © 2003-2018 Bond Capital Mezzanine Inc. -
Preparing a Venture Capital Term Sheet
Preparing a Venture Capital Term Sheet Prepared By: DB1/ 78451891.1 © Morgan, Lewis & Bockius LLP TABLE OF CONTENTS Page I. Purpose of the Term Sheet................................................................................................. 3 II. Ensuring that the Term Sheet is Non-Binding................................................................... 3 III. Terms that Impact Economics ........................................................................................... 4 A. Type of Securities .................................................................................................. 4 B. Warrants................................................................................................................. 5 C. Amount of Investment and Capitalization ............................................................. 5 D. Price Per Share....................................................................................................... 5 E. Dividends ............................................................................................................... 6 F. Rights Upon Liquidation........................................................................................ 7 G. Redemption or Repurchase Rights......................................................................... 8 H. Reimbursement of Investor Expenses.................................................................... 8 I. Vesting of Founder Shares..................................................................................... 8 J. Employee