The Art of M&a, Fifth Edition: A Merger, Acquisition, and Buyout Guide (Hardcover, 5)

FOREWORD

PREFACE AND ACKNOWLEDGMENTS

Chapter 1 Getting Started in Mergers and Acquisition
Introduction ? Key Terms ? About Our Question-and-Answer Format ? Concluding Comments ? Exhibit 1-1: Global M&A Transaction Value (1988 vs. 2018) ? Exhibit 1-2: The M&A Process ? Notes

Chapter 2 Strategy
Introduction ? Strategic Planning ? The Role of M&A in Strategic
Planning ? Alternatives to M&A ? SWOT Analysis ? Disclosure of
Strategy ? Levels of Strategy ? Four Types of M&A Strategy ? The Search
Process ? Brokers and Finders ? Bankers ? Initial Regulatory and Legal
Considerations ? Concluding Comments ? Exhibit 2-1: Outline for a Typical
Strategic Plan ? Exhibit 2-2: M&A in a Strategic Decision Tree ? Exhibit 2-3:
Range of Structure for Business Collaboration ? Exhibit 2-4: Sample SWOT
Analysis Questions ? Exhibit 2-5: Sample Checklist of Assets for Use in
Complement/Supplement Analysis ? Exhibit 2-6: Sample Checklist of Risks for
Use in Seeking Complementary Acquisitions ? Exhibit 2-7: Sample Strategy
Statements ? Exhibit 2-8: What Is Alphabet? ? Exhibit 2-9: Examples of
Options Embedded in Strategic Acquisitions ? Exhibit 2-10: The AI Acquisition
Race ? Exhibit 2-11: Sherwin-Williams?Vertical Strategy Leads to Horizontal
Move ? Exhibit 2-12: A Guide to M&A Decisions ? Exhibit 2-13: Opportunity
Prioritization ? Exhibit 2-14: Premerger Notification Thresholds Under Hart-
Scott-Rodino ? Appendix 2A: Types of Organizational Structure ? Appendix 2B: Checklist of Assets ? Appendix 2C: Horizontal Merger Guidelines ? Appendix 2D: Tesoro Strikes Gold in California ? Notes

Chapter 3 Valuation and Modeling
Introduction ? Valuation Fundamentals ? Choosing a Valuation Approach ? Comparable Companies and Transactions ? Comparable Transactions Analysis ? DCF Analysis ? Forecasting Free Cash Flow ? Calculating the Discount Rate ? Ascribing a Terminal Value ? Conducting Sensitivity
Analyses ? The IVS Framework ? Concluding Comments ? Exhibit 3-1: Valuation Approaches ? Exhibit 3-2: Advantages and Disadvantages of Valuation Multiples ? Exhibit 3-3: Common Multiples Used in Selected Sectors ? Exhibit 3-4: Comparable Companies Checklist ? Exhibit 3-5: Variations in Accounting May Affect Valuation Multiples ? Exhibit 3-6: Comparable Transactions Checklist ? Exhibit 3-7: Summary of Precedent Transactions ? Exhibit 3-8: Overview of the DCF Analysis Process ? Exhibit 3-9: Advantages of DCF Analysis ? Exhibit 3-10: Disadvanatges of DCF Analysis ? Exhibit 3-11: Defining Free Cash Flow?Top-down Approach ? Exhibit 3-12: Calculating Free Cash Flow?Example of Top-down Approach ? Exhibit 3-13: Defining Free Cash Flow?Bottom-up Approach ? Exhibit 3-14: Calculating Free Cash Flow?Example of Bottom-up Approach ? Exhibit 3-15: Present Value Formula ? Exhibit 3-16: WACC Formula ? Exhibit 3-17: Cost of Common Equity Formula ? Exhibit 3-18: Chart Showing Size Premiums by Quartile and Decile ? Exhibit 3-19: Chart Showing Size Premiums by Decile ? Exhibit 3-20: Exit Multiple Approach to Estimating Terminal Value ? Exhibit 3-21: Terminal Value Model Assuming Constant Growth ? Exhibit 3-22: Perpetuity Value Assuming No Growth in Cash Flows ? Exhibit 3-23: Perpetuity Value Assuming 2 Percent Growth ? Exhibit 3-24: DCF for a Business Already in Constant Growth Mode ? Exhibit 3-25: DCF for a No. 2 Pencil Manufacturer ? Notes

Chapter 4 Financing and Refinancing
Introduction ? Financing Overview ? Financing Instruments: Equity vs. Debt vs. Hybrids ? Financing Sources ? Highly Leveraged Transactions ? Minimizing Borrowing ? Determining Structure in Debt Financing ? Senior Debt ? Sale-Leasebacks ? Pros and Cons of Preserving Debt and Lease Obligations ? Seller Takeback Financing ? Warrants ? Working Capital Debt of the Seller ? The Bank Book and Commitment Letter ? Other Principal Issues in Senior Loan Agreements ? High-Yield (a.k.a. “Junk”) Bonds ? Bridge Loans ? Equity Investment Funds ? Registration Rights ? Intercreditor Issues ? Subordination Issues ? Intercreditor Agreements ? Fraudulent Conveyance and Other Litigation Concerns ? Refinancing Issues ? Concluding Comments ? Exhibit 4-1: The LBO of Beatrice and Its Aftermath ? Exhibit 4-2: Sample Company’s Cash Flow and Debt Service Requirements ? Exhibit 4-3: Sample Covenant ? Exhibit 4-4: Subordination and Corporate Structure ? Appendix 4A: Typical Subordination Provisions of Publicly Issued Notes ? Appendix 4B: Typical Subordination Provisions of Privately Placed Institutional Notes ? Appendix 4C: Typical Subordination Provisions of Seller Notes ? Notes

Chapter 5 Structuring Transactions: General, Tax, and Accounting Considerations
Introduction ? General Considerations ? Structuring Asset Transactions ? Structuring Stock Transactions ? Structuring Merger Transactions ? General Accounting Considerations ? Allocating the Price of a Transaction for Accounting Purposes ? Difference Between Accounting and Tax Treatments ? Tax Considerations ? Basic Tax Concepts and Definitions ? Basic Tax Structure: Taxable Transactions ? Basic Tax Structure: Tax-Deferred Transactions ? Choice of Entity ? Tax Consequences in Structuring Acquisition
Debt Financing ? Management Buyout Tax Basics ? Postacquisition Tax Issues ? Other Tax Issues ? Concluding Comments ? Transaction Diagrams ? Exhibit 5-1: A Guide to US (Federal) and State Codes ? Exhibit 5-2: Forward Subsidiary Merger (FSM) vs. Reverse Subsidiary Merger (RSM) ? Exhibit 5-3: Anatomy of a Merger, Acquisition, and Buyout Transaction ? Exhibit 5-4: Description of Acquisition Allocation from Emcor Group, Inc. ? Exhibit 5-5: Differences in the Purchase Price Computation ? Exhibit 5-6: Section 368: Types of Reorganization ? Exhibit 5-7: Stock Purchase ? Exhibit 5-8: Asset Purchase ? Exhibit 5-9: Taxable Forward Merger ? Exhibit 5-10: Taxable Reverse Merger ? Exhibit 5-11: Taxable Forward Subsidiary Merger ? Exhibit 5-12: Tax-Free Forward Merger (A Reorganization) ? Exhibit 5-13: Tax-Free Forward Triangular Merger ? Exhibit 5-14: Tax-Free Acquisition of Stock for Voting Stock (B Reorganization) ? Exhibit 5-15: Acquisition of Property for Voting Stock (C Reorganization) ? Exhibit 5-16: Acquisition of Property for Voting Stock (D Reorganization) ? Exhibit 5-17: National Starch Transaction (Section 351 Acquisition) ? Appendix 5A: Meeting the Reorganization Test: US Examples from the Internal Revenue Service ? Notes

Chapter 6 The Due Diligence Inquiry
Introduction ? Getting Started ? Duration of Due Diligence ? Due Diligence Levels ? Securities Laws and Due Diligence ? Red Flags ? Relations with the Seller ? Location of Due Diligence Research ? Evaluating Assets ? Litigation Analysis ? Emerging Legal Issues ? Due Diligence After Closing ? Concluding Comments ? Exhibit 6-1: VDR Menu Screen Shot ? Exhibit 6-2: A Representative List of Virtual Data Room Providers ? Exhibit 6-3: Some Typical Plaintiff Claims in M&A Litigation ? Exhibit 6-4: Venn Diagram Showing Interrelationship of M&A, Due Diligence Standards, and Securities Law ? Appendix 6A: Sample Confidentiality Agreement ? Appendix 6B: Due Diligence Checklist ? Appendix 6C: An Annotated Initial Document and Information Request List ? Appendix 6D: Sample Index of VDR Documents ? Notes

Chapter 7 Negotiating the Letter of Intent and Acquisition Agreement
Introduction ? Letter of Intent ? The Acquisition Agreement ? Components of the Agreement ? Introductory Material ? Representations and Warranties ? Covenants ? Conditions to Closing ? Indemnity Section ? Acquisitions from an Affiliated Group ? Transactions Involving Public Companies ? Negotiating and Documenting an MBO ? Employment Agreements ? Stockholders’ Agreements ? Concluding Comments ? Exhibit 7-1: Seller vs. Buyer Key Goals ? Exhibit 7-2: The Safeguards-Price Negotiating Matrix ? Exhibit 7-3: The FASB on Materiality ? Appendix 7A: Sample Letter of Intent ? Appendix 7B:Typical Merger Agreement and Commentary ? Notes

Chapter 8 Closing
Introduction ? The Basics of Closing ? Planning the Closing ? Preclosing ? Closing ? Wire Transfers ? Postclosing ? Concluding
Comments ? Appendix 8A: Sample Closing Memorandum (Including a Detailed Schedule of Closing Documents) ? Notes

Chapter 9 Postmerger Integration and Divestitures
Introduction ? Basic Concepts of Integration ? The Postmerger Plan ? Communicating the Integration Plan ? Combining Company Names ? Integrating Cultures ? Integrating Mission, Policy, Ethics, and Vision Statements ? Integrating Key Resources, Processes, and Responsibilities ? Integrating Resources ? Integrating Processes ? Integrating Responsibilities ? Commitments to Employees ? Postmerger Compensation: A Complex Issue ? Planning Pay Integration: A Strategic Overview ? Merging Benefits Plans ? Some General Postmerger Technology Considerations ? Divestitures ? Concluding Comments ? Exhibit 9-1: Audience Media Communications Matrix ? Exhibit 9-2: Steps for Naming a Newly Combined Company ? Exhibit 9-3: A Matrix for Planning Cultural Integration ? Exhibit 9-4: Acquisition Integration Plan for Human Resources Operation ? Exhibit 9-5: Three Brand Approaches ? Exhibit 9-6: Sample Plan for 30-, 60-, and 90+-Day Milestones ? Exhibit 9-7: Old Line Bank and Bay Bank Merger FAQ (Excerpts) ? Exhibit 9-8: Marathon Patent Press Release Addressing the Dilution Issue ? Exhibit 9-9: Sample Matrix for Postmerger Compensation Planning ? Exhibit 9-10: Valuing the Divestiture Option ? Exhibit 9-11: The WARN Act: Basic Provisions/Requirements ? Appendix 9A: Sample Postmerger Press Release Highlighting Strategic Motivation ? Appendix 9B: Sample “Assets” Checklist of Resources, Processes, and Responsibilities ? Appendix 9C: Integration Planning Worksheet ? Appendix 9D: Integration Timeline from a Midsized Acquirer ? Appendix 9E: Pairwise Comparison ? Appendix 9F: Principles for Responsible Business ? Exhibit 9E-1: Setting Up the Pairwise Comparison Matrix ? Exhibit 9E-2: Identifying the Useful Part of the Matrix ? Exhibit 9E-3: Filling the Useful Part of the Matrix ? Notes

Chapter 10 Special Issues for M&A in Public Companies
Introduction ? General Considerations ? Proxy Voting ? Dodd-Frank, Sarbanes-Oxley, and M&A ? Duties of Care and Loyalty ? Director Responsibilities in Responding to Unsolicited Bids ? M&A Forms ? Tender Offer Basics ? Proxy Solicitations ? Going Private ? Merger Disclosure Issues ? Insider Trading ? Financing the Two-Step Public Transaction with Debt ? Takeover Defenses ? State Laws Related to Takeover Defense ? Concluding Comments ? Exhibit 10-1: Some Typical Plaintiff Claims in M&A Litigation ? Exhibit 10-2: Federal Class Actions on M&A 2010?2018 ? Exhibit 10-3: Likely Responses to Tender Offers Versus Management Promises ? Notes

Chapter 11 Workouts, Bankruptcies, and Liquidations
Introduction ? General Considerations ? Workouts ? Bankruptcy ? State Insolvency Proceedings ? Investing Opportunities: Structuring the Purchase of a Troubled Company ? Structuring a Buyout to Minimize Insolvency

Risk ? Financing Alternatives for Companies with Losses ? Accounting/Tax Issues for Companies with Losses ? Liquidation ? Concluding Comments ? Diagrams Showing Various Structures for Reorganizations and Workouts of Insolvent Companies ? Exhibit 11-1: Definitions of Bankruptcy ? Exhibit 11-2: Average Corporate Debt Recovery Rates Measured by Ultimate Recoveries, 1987?2018 ? Exhibit 11-3: Business vs. Computer Bankruptcies ? Exhibit 11-4: Some Common Consolidation Scenarios Applying ASC 810 ? Exhibit 11-5: The 10 Largest Bankruptcies in the United States (by Total Assets Pre-Bankruptcy) ? Exhibit 11-6: Structure Posing No Fraudulent Conveyance Risk ? Exhibit 11-7: Structure Posing Fraudulent Conveyance Risk via Guarantee ? Exhibit 11-8: Structure Posing Fraudulent Conveyance Risk via Transfer of Loan Recipient ? Exhibit 11-9: Structure Posing Fraudulent Conveyance Risk via Simple Merger ? Exhibit 11-10: Structure Posing Fraudulent Conveyance Risk via Distribution to Target Shareholder ? Exhibit 11-11: Structure Posing Risk of Fraudulent Conveyance in Multistep Transaction Involving Small Stock Purchase and Large Loan ? Exhibit 11-12: Structure Posing Fraudulent Conveyance Risk via Transfer of Risk to a Subsidiary ? Notes

Chapter 12 Global Deals: Structuring for Success
Introduction ? Nontax Inbound: Issues Regarding Foreign Investment in the United States ? Nontax Outbound: Acquisitions Involving Assets Located Outside the United States ? Foreign Exchange ? Other Global Realities ? Financing Outbound Transactions ? International Tax and Disclosure Considerations ? Tax Considerations in Inbound Acquisitions ? Tax Considerations in Outbound Acquisitions ? Concluding Comments ? Exhibit 12-1: Examples of Eurocurrencies ? Appendix 12-1:Meeting the Reorganization Test: Foreign Examples from the Internal Revenue Service ? Notes
Landmark and Recent M&A Legal Cases
Cases Alleging Impropriety in Purchasing (or Disclosing an Offer to Purchase) a Company or Controlling Shares ? Cases Alleging Impropriety in the Valuation and/or Sale of a Business, Assets, or Controlling Shares ? Cases Involving M&A Agreements or Other Contracts ? Cases Alleging Violation of Antitrust Laws ? Cases Alleging Violations of Health, Safety, and Labor Laws in an M&A Context ? Cases Dealing with Jurisdiction or Right to Sue Following a Merger ? Additional Cases

INDEX