Mergers and Acquisitions Basics: The Key Steps of Acquisitions, Divestitures, and Investments (Hardcover, 2)

Preface ix

Acknowledgments xi

CHAPTER 1 Introduction 1

Notes 8

CHAPTER 2 The Players 10

The Buyer 10

The Seller 17

Investors/Owners 19

Corporate Staff 29

Advisors 36

Regulators 46

Others 49

Notes 51

CHAPTER 3 Decision to Buy or Sell 55

Reasons to Buy 56

Choosing to Sell 70

Notes 84

CHAPTER 4 Buyer’s Preparation for the Deal 85

Developing a Strategy 85

Building a Capability 89

Devising a Process 95

Planning the Message 102

Notes 103

CHAPTER 5 Seller’s Preparation for the Deal 104

Building a Capability 104

Making the Business Most Sellable; Cleaning It Up 107

Setting Expectations with Constituents 130

Preparing the Business for Sale 134

Notes 145

CHAPTER 6 Deal Process 147

Determining the Universe of Buyers 148

Making the Approach 149

One-on-One Negotiation 151

Formal Auction 155

Informal Auction 159

Bankruptcy Auction 160

Direct versus Proxy 161

Relative Positions of Power 161

International M&A 162

Seller Behavior and Building Trust 167

Notes 173

CHAPTER 7 Due Diligence 174

Building a Team 174

What the Buyer Wants to Know 186

Notes 209

CHAPTER 8 Valuation 211

Standard Valuation Methods 212

Pro Forma: Finding and Splitting the Upside 228

Getting the Valuation and Pro Forma Done 239

Deal Structure and Consideration 255

Notes 259

CHAPTER 9 Integration Planning 261

Dedicating Resources 262

Linking Due Diligence to Integration Planning and Execution 263

Key Integration Issues 264

Notes 275

CHAPTER 10 Financing Issues 276

Cost of Capital 276

Lost Opportunities 285

Financing Contingency: “Bird in the Hand” 286

Notes 287

CHAPTER 11 Closing the Deal and After 288

How Is a Deal Closed? 288

Other Signing and Closing Events 291

Post-Closing Issues 294

Integration and Look Back (the Postmortem) 295

Note 296

APPENDIX A Standard Form Deliverables During a Strategic Transaction Example 297

APPENDIX B

B1: Due Diligence Report Table of Contents 298

B2: Due Diligence Report for Project X 299

APPENDIX C Standard Deal Process Checklist Example 301

APPENDIX D Standard Approval Process Example 303

APPENDIX E Approval of a Strategic Transaction: Key Topics in Presentation 304

APPENDIX F Generic Valuation Exercise 306

APPENDIX G Generic Acquisition Term Sheet for Acquisition by Public Buyer of Privately Held Target 307

APPENDIX H Generic Investment Term Sheet for Project “Moon” 313

APPENDIX I Notable Transaction Issues by Country/Territory 315

Index 325