Dedication
by Donald DePamphilis
Mergers, Acquisitions, and Other Restructuring Activities, 10th Edition
- Cover image
- Title page
- Table of Contents
- Copyright
- Dedication
- About the Author
- Preface to the Tenth Edition
- Acknowledgments
- Part I: The Mergers and Acquisitions Environment
- Introduction
- Chapter 1: An Introduction to Mergers, Acquisitions, and Other Restructuring Activities
- Abstract
- Inside Mergers and Acquisitions: Centurylink Acquires Level 3 in a Search for Scale
- Chapter Overview
- Why Do M&As Happen?
- Merger and Acquisition Waves
- Understanding Corporate Restructuring Activities
- Alternative Takeover Strategies
- The Role of Holding Companies in Mergers and Acquisitions
- The Role of Employee Stock Ownership Plans (ESOPs) in M&As
- Business Alliances as Alternatives to M&As
- Participants in the Mergers and Acquisitions Process
- The Implications of M&As for Shareholders, Bondholders, and Society
- Some Things to Remember
- Chapter Discussion Questions
- Chapter 2: The Regulatory Environment
- Abstract
- Inside Mergers and Acquisitions: DowDuPont’s Regulatory Nightmare
- Chapter Overview
- Understanding Federal Securities Laws
- Understanding Antitrust Legislation
- M&A Implications of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Including 2018 Revisions)
- M&A Implications of Data Protection Regulations
- State Regulations Affecting Mergers and Acquisitions
- Restrictions on Direct Investment in the United States
- The US Foreign Corrupt Practices Act
- Specific Industry Regulation
- Environmental Laws
- Labor and Benefit Laws
- Cross-Border Transactions
- Some Things to Remember
- Chapter Discussion Questions
- Chapter 3: The Corporate Takeover Market: Common Takeover Tactics, Antitakeover Defenses, and Corporate Governance
- Abstract
- Inside Mergers and Acquisitions: Auction Euphoria Can Result in Buyer’s Remorse
- Chapter Overview
- Corporate Governance
- Understanding Alternative Takeover Tactics
- Other Tactical Considerations
- Developing a Bidding Strategy
- Activist Investors: Gaining Influence Without Control
- Understanding Alternative Takeover Defenses
- The Impact of Takeover Defenses on Shareholder Value
- Some Things to Remember
- Chapter Discussion Questions
- Part II: The Mergers and Acquisitions Process: Phases 1–10
- Introduction
- Chapter 4: Planning: Developing Business and Acquisition Plans—Phases 1 and 2 of the Acquisition Process
- Abstract
- Inside Mergers and Acquisitions: Home Shopping Feels the Heat From Amazon
- Chapter Overview
- The Role of Planning in Mergers and Acquisitions
- The Merger and Acquisition Process
- Phase 1: Building the Business Plan/Model
- The Business Plan as a Communication Document
- Phase 2: Building the Merger-Acquisition Implementation Plan
- Some Things to Remember
- Chapter Discussion Questions
- Chapter 5: Implementation: Search Through Closing—Phases 3–10 of the Acquisition Process
- Abstract
- Inside M&A: In the Wake of Industry Consolidation Discovery Communications Buys Scripps Networks
- Chapter Overview
- Characteristics of High Performing Acquirers
- Phase 3: The Search Process
- Phase 4: The Screening Process
- Phase 5: First Contact
- Phase 6: Negotiation
- Phase 7: Developing the Integration Plan
- Phase 8: Closing
- Phase 9: Implementing Postclosing Integration
- Phase 10: Conducting a Postclosing Evaluation
- The Increasing Application of Data Analytics in M&As
- Some Things to Remember
- Chapter Discussion Questions
- Chapter 6: Postclosing Integration: Mergers, Acquisitions, and Business Alliances
- Abstract
- Inside Mergers and Acquisitions: Postmerger Integration Challenges
- Chapter Overview
- The Degree of Integration Varies by Type of Acquirer and Deal
- The Role of Integration in Successful Acquisitions
- Integration Is a Process, Not an Event
- Integrating Business Alliances
- Integrating Family Owned Firms
- Some Things to Remember
- Chapter Discussion Questions
- Part III: Mergers and Acquisitions Valuation and Modeling
- Introduction
- Chapter 7: Mergers and Acquisitions Cash Flow Valuation Basics
- Abstract
- Inside M&A: Delaware Supreme Court Rules on the Role of Valuation Methods in Appraisal Rights
- Chapter Overview
- Estimating Required Financial Returns
- Risk Assessment
- Calculating Free Cash Flows
- Applying Discounted Cash Flow Methods
- Using the Enterprise Method to Estimate Equity Value
- Valuing Nonoperating Assets
- Some Things to Remember
- Chapter Discussion Questions
- Practice Problems and Answers
- Chapter 8: Relative, Asset-Oriented, and Real Option Valuation Basics
- Abstract
- Inside Mergers & Acquisitions: Thyssenkrupp and Tata Steel Combine European Steel Operations
- Chapter Overview
- Relative-Valuation Methods
- Asset-Oriented Methods
- The Weighted-Average Valuation Method
- Real-Options Analysis
- Determining When to Use the Different Approaches to Valuation
- Valuing Initial Public Offerings
- What Do Valuation Professionals Do in Practice?
- Some Things to Remember
- Chapter Discussion Questions
- Practice Problems and Answers
- Chapter 9: Financial Modeling Basics
- Abstract
- Inside M&A: Verizon Discounts the Yahoo Purchase Price
- Chapter Overview
- What Is Financial Modeling?
- Financial Modeling Data Requirements
- Common Financial Model Linkages
- Modelling Changes in US Corporate Tax Laws
- Key Steps in the Valuation Process
- Model Balancing Mechanism
- Data Sources
- Managing the Model
- Addressing Valuation Issues in a Near Zero Interest Rate Environment
- Some Things to Remember
- Chapter Discussion Questions
- Practice Problems and Answers
- Chapter 10: Analysis and Valuation of Privately Held Firms
- Abstract
- Inside M&A: The Need for Capital Forces Sale of Demand Energy
- Chapter Overview
- How Family Control Affects M&A Activity
- Private Versus Public Company Governance
- Challenges of Valuing Privately Held Companies
- Process for Valuing Privately Held Businesses
- Step 1: Adjusting Financial Statements
- Step 2: Applying Valuation Methodologies to Privately Held Companies
- Step 3: Developing Discount Rates
- Step 4: Applying Control Premiums, Liquidity, and Minority Discounts
- Early Stage Investment
- Taking Private Companies Public
- Using Leveraged Employee Stock Ownership Plans to Buy Private Companies
- Empirical Studies of Shareholder Returns
- Some Things to Remember
- Chapter Discussion Questions
- Practice Problems and Answers
- Part IV: Deal Structuring and Financing Strategies
- Introduction
- Chapter 11: Structuring the Deal: Payment and Legal Considerations
- Abstract
- Inside M&A: Getting to Yes on Price
- Chapter Overview
- The Deal-Structuring Process
- Form of Acquisition Vehicle and Postclosing Organization
- Legal Form of the Selling Entity
- Form of Payment
- Managing Risk and Reaching Consensus on Purchase Price
- Constructing Collar Arrangements
- M&A Options and Warrants Takeover Strategies
- Form of Acquisition
- Some Things to Remember
- Chapter Discussion Questions
- Chapter 12: Structuring the Deal: Tax and Accounting Considerations
- Abstract
- Inside M&A: CVS’s Takeover of Aetna Blurs Traditional Roles in the US Healthcare Industry
- Chapter Overview
- Understanding Tax Authority Communications
- Alternative Tax Structures
- Taxable Transactions
- Tax-Free Transactions
- Tax Cuts and Jobs Act of 2017
- State and Local Tax Issues
- International Taxes
- Tax Inversions
- Master Limited Partnerships (MLPs), Real Estate Investment Trusts (REITs), and Yield Cos
- Financial Reporting of Business Combinations
- Impact of Acquisition Accounting on Business Combinations
- Recapitalization (“RECAP”) Accounting
- Putting It All Together: Takeover and Deal Structure Strategies
- Some Things to Remember
- Chapter Discussion Questions
- Practice Problems and Answers
- Chapter 13: Financing the Deal: Private Equity, Hedge Funds, and Other Sources of Financing
- Abstract
- Inside M&A: Staples Goes Private in Response to the Shift to Online Retailing
- Chapter Overview
- The Role of Public and Private Financial Markets
- How Are M&A Transactions Commonly Financed?
- What Is the Role of Private Equity, Hedge, and Venture Capital Funds in Deal Financing?
- Impact of Tax Reform on M&A Financing
- Leveraged Buyouts as Financing Strategies
- What Factors Are Critical to Successful LBO’s?
- How Do LBO’s Create Value?
- The Impact on Financial Returns of Alternative Transaction Strategies
- Common LBO Deal and Capital Structures
- Some Things to Remember
- Chapter Discussion Questions
- Chapter 14: Applying Financial Models: To Value, Structure, and Negotiate Stock and Asset Purchases
- Abstract
- Inside M&A: The Anatomy of a M&A Negotiation
- Chapter Overview
- Understanding and Applying M&A Financial Models
- M&A Models: Stock Purchases
- M&A Models: Asset Purchases
- Quantifying Synergy
- Things to Remember
- Chapter Discussion Questions
- Practice Problems and Answers
- Appendix A: Debt Repayment Schedule, Convertible Securities, Interest Rates, and Betas
- Part V: Alternative Business and Restructuring Strategies
- Introduction
- Chapter 15: Domestic and Cross-Border Business Alliances: Joint Ventures, Partnerships, Strategic Alliances, and Licensing
- Abstract
- Inside M&A: Comcast and Charter Forge Wireless Alliance
- Chapter Overview
- Motivations for Business Alliances
- What Makes Business Alliances Successful?
- Alternative Legal Forms of Business Alliances
- Bilateral Versus Multilateral Alliances
- Strategic and Operational Plans
- Resolving Business Alliance Deal-Structuring Issues
- Challenges of Cross-Border Joint Ventures
- Potential Impediments to Cross-Border Alliances and Minority Investments
- Empirical Findings
- Some Things to Remember
- Chapter Discussion Questions
- Chapter 16: Alternative Exit and Restructuring Strategies: Divestitures, Spin-Offs, Carve-Outs, Split-Offs, and Tracking Stocks
- Abstract
- Inside M&A: Managing Risk Through Restructuring
- Chapter Overview
- Why Do Firms Exit Businesses?
- Divestitures
- Spin-Offs
- Equity Carve-Outs
- Split-Offs and Split-Ups
- Tracking, Targeted, and Letter Stocks
- Restructuring Implementation Issues
- Key Restructure Legal Documents
- Comparing Alternative Exit and Restructuring Strategies
- Choosing Among Divestiture, Carve-Out, and Spin-Off Restructuring Strategies
- Determinants of Returns to Shareholders Resulting From Restructuring Strategies
- Some Things to Remember
- Chapter Discussion Questions
- Chapter 17: Alternative Exit and Restructuring Strategies: Bankruptcy, Reorganization, and Liquidation
- Abstract
- Inside M&A: SunEdison Exits Bankruptcy Amid Echoes of Enron
- Chapter Overview
- Business Failure
- Voluntary Settlement Outside of Bankruptcy Court
- Reorganization and Liquidation in Bankruptcy
- Alternative Options for Failing Firms
- The Increasing Role of Hedge Funds in the Bankruptcy Process
- Failing Firms and Systemic Risk
- Predicting Corporate Default and Bankruptcy
- Empirical Studies of Financial Distress
- Some Things to Remember
- Chapter Discussion Questions
- Chapter 18: Cross-Border Mergers and Acquisitions: Analysis and Valuation
- Abstract
- Inside M&A: Shareholder Angst Causes Breakup of Merger and Longstanding Joint Venture
- Chapter Overview
- Globally Integrated Versus Segmented Capital Markets
- Motives for International Expansion
- Common International Market Entry Strategies
- Structuring Cross-Border Deals
- Financing Cross-Border Deals
- Planning and Implementing Cross-Border Transactions in Emerging Countries
- How Are Cross-Border Transactions Valued?
- Empirical Studies of Financial Returns on Cross-Border Transactions
- Some Things to Remember
- Chapter Discussion Questions
- References
- Glossary
- Index
Dedication
I would like to express my gratitude for my wife, Cheryl, and my daughter, Cara, whose patience made the completion of this book possible; for my brother, Mel, who encouraged me to undertake this book; and for the blessings of my beautiful grandchildren Max and Hannah.
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