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Mergers, Acquisitions, and Other Restructuring Activities

Book Description

In the fifth edition of this well-known text, Dr. DePamphilis explains the real world of mergers, acquisitions, and restructuring based on his academic knowledge and personal experiences with over 30 such deals himself. The CDROM and password-protected website for students is unique in enabling students to download and customize content. Important enhancements unique to the fifth edition: all 99 cases involve real-life deals made or announced within the last five years, extensive discussions of all current valuation techniques and their strengths and weaknesses, cross-border transactions analyzed and explained in detail, tax and legal issues covered comprehensively. Student Resource CDROM contains with hundreds of practice problems in interactive tests providing immediate feedback and solutions, chapter outlines, and selected case study solutions. Complete on-line instructor's manual completely updated as well including test bank with hundreds of questions not provided to students, in multiple choice, true false and essay format and all with answers, case study questions and solutions, ppt slides for each lecture, and many other instructor resources. Instructors can load the test bank into their institutions LMS for randomized and scoring tests.

Focuses on the REAL WORLD, not just theory. The 99 case studies span every industry and dozens of countries and show how deals are done rather than just the theory behind them. All cases fully updated for this edition. Cases all involve transactions that have occurred or been announced within the past 3-5 years. All cases have questions and problems and solutions for the instructors on protected website.

Dozens of excel-based models of valuation, cash flows and other key financial aspects of M&A decisionmaking are provided on the Student Resources CDROM. These are all interactive and can be downloaded and customized by the students or within the context of practice cases and tests with instructor provided data. The Interactive Learning Library puts the learning tools into the students hands to they can learn in their way on their time.

Extensive updating and enhanced content provided on reorganization, bankruptcy, and liquidation issues both inside and outside of bankruptcy court

Table of Contents

  1. Cover Image
  2. Content
  3. Title
  4. Front matter
  5. Copyright
  6. Dedication
  7. List of Business Case Studies
  8. Preface
  9. Acknowledgments
  10. About the Author
  11. PART I. The Mergers and Acquisitions Environment
    1. Introduction
    2. Chapter 1. Introduction to Mergers and Acquisitions
      1. Inside M&A: dell moves into information technology services
      2. Chapter overview
      3. Mergers and Acquisitions as Change Agents
      4. Why Mergers and Acquisitions Happen
      5. Merger and acquisition waves
      6. Why It Is Important to Anticipate Merger Waves
      7. Alternative forms of corporate restructuring
      8. Friendly versus hostile takeovers
      9. The role of holding companies in mergers and acquisitions
      10. The role of employee stock ownership plans in M&As
      11. Business Alliances as Alternatives to Mergers and Acquisitions
      12. Participants in the Mergers and Acquisitions Process
      13. Alternative investors and lenders
      14. Activist Investors and M&A Arbitrageurs
      15. Do M&As pay off for shareholders, bondholders, and society?
      16. Why some M&As fail to meet expectations
      17. Long-term performance
      18. Some things to remember
      19. Chapter business cases
    3. Chapter 2. Regulatory Considerations
      1. Inside M&A: The limitations of regulation and the lehman brothers meltdown
      2. Chapter overview
      3. Federal securities laws
      4. Antitrust laws
      5. Dodd-frank wall street reform and consumer protection act
      6. State Regulations Affecting Mergers and Acquisitions
      7. National Security-Related Restrictions on Direct Foreign Investment in the United States
      8. The U.S. foreign corrupt practices act
      9. Fair disclosure (regulation FD)
      10. Regulated Industries
      11. Environmental laws
      12. Labor and benefit laws
      13. Cross-border transactions
      14. Some Things to Remember
      15. Chapter Business Cases
    4. Chapter 3. The Corporate Takeover Market
      1. Inside M&A: kraft sweetens its offer to overcome cadbury's resistance
      2. Chapter overview
      3. Alternative models of corporate governance
      4. Factors that affect corporate governance
      5. Alternative takeover tactics in the corporate takeover market
      6. What makes the aggressive approach successful?
      7. Other tactical considerations
      8. Developing a bidding or takeover strategy
      9. Alternative takeover defenses in the corporate takeover market
      10. The impact of takeover defenses on shareholder and bondholder value
      11. Some things to remember
      12. Chapter business cases
  12. PART II. The Mergers and Acquisitions Process: Phases 1 through 10
    1. Introduction
    2. Chapter 4. Planning: Developing Business and Acquisition Plans
      1. Inside M&A: Nokia's Gamble to Dominate the Smartphone Market Falters
      2. Chapter Overview
      3. A Planning-Based Approach to M&As
      4. Phase 1: Building the Business Plan
      5. The Business Plan as a Communication Document
      6. Phase 2: Building the Merger–Acquisition Implementation Plan
      7. Some Things to Remember
      8. Chapter Business Cases
    3. Chapter 5. Implementation: Search through Closing
      1. Inside M&A: bank of america acquires merrill lynch
      2. Chapter overview
      3. Phase 3: the search process
      4. Phase 4: the screening process
      5. Phase 5: first contact
      6. Phase 6: negotiation
      7. Phase 7: developing the integration plan
      8. Phase 8: closing
      9. Phase 9: implementing postclosing integration
      10. Phase 10: conducting a postclosing evaluation
      11. Some things to remember
      12. Chapter business cases
    4. Chapter 6. Integration
      1. Inside M&A: general electric's water business fails to meet expectations
      2. Chapter overview
      3. The role of integration in successful M&As
      4. Viewing integration as a process
      5. Integrating business alliances
      6. Some things to remember
      7. Chapter business cases
  13. PART III. Merger and Acquisition Valuation and Modeling
    1. Introduction
    2. Chapter 7. A Primer on Merger and Acquisition Cash-Flow Valuation
      1. Inside M&A: the importance of distinguishing between operating and nonoperating assets
      2. Chapter overview
      3. Required returns
      4. Analyzing risk
      5. Calculating free cash flows
      6. Applying income or discounted-cash-flow methods
      7. Valuing firms subject to multiple growth periods
      8. Valuing firms under special situations
      9. Using the enterprise method to estimate equity value
      10. Valuing nonoperating assets
      11. Putting it all together
      12. Some things to remember
      13. Chapter business cases
    3. Chapter 8. Applying Relative, Asset-Oriented, and Real-Option Valuation Methods to Mergers and Acquisitions
      1. Inside M&A: a real-options perspective on microsoft's dealings with Yahoo!
      2. Chapter overview
      3. Applying relative-valuation (market-based) methods
      4. Applying asset-oriented methods
      5. The replacement cost method
      6. Valuing the firm using the weighted-average method
      7. Analyzing mergers and acquisitions in terms of real options
      8. Determining when to use the different approaches to valuation
      9. Which valuation methods are actually used in practice
      10. Some things to remember
      11. Chapter business cases
    4. Chapter 9. Applying Financial Modeling Techniques
      1. Inside M&A: HP buys EDS—the role of financial models in decision making
      2. Chapter overview
      3. Limitations of financial data
      4. The model-building process
      5. Using financial models in support of M&A negotiations
      6. Alternative applications of M&A financial models
      7. Some things to remember
      8. Chapter business cases
    5. Chapter 10. Analysis and Valuation of Privately Held Companies
      1. Inside M&A: cashing out of a privately held enterprise
      2. Chapter overview
      3. Demographics of privately held businesses
      4. Governance issues in privately held and family-owned firms
      5. Challenges of valuing privately held companies
      6. Process for valuing privately held businesses
      7. Step 1: adjusting financial statements
      8. Step 2: applying valuation methodologies to privately held companies
      9. Step 3: developing discount (capitalization) rates
      10. Step 4: applying control premiums, liquidity, and minority discounts
      11. Reverse mergers
      12. Using leveraged employee stock ownership plans to buy private companies
      13. Empirical studies of shareholder returns
      14. Some things to remember
      15. Chapter Business Cases
  14. PART IV. Deal-Structuring and Financing Strategies
    1. Introduction
    2. Chapter 11. Structuring the Deal
      1. Inside M&A: pfizer acquires wyeth labs despite tight credit markets
      2. Chapter overview
      3. The deal-structuring process
      4. Form of acquisition vehicle and postclosing organization
      5. Legal form of the selling entity
      6. Form of payment or total consideration
      7. Managing risk and closing the gap on price
      8. Using collar arrangements to preserve shareholder value
      9. Form of acquisition
      10. Some things to remember
      11. Chapter business cases
    3. Chapter 12. Structuring the Deal
      1. Inside M&A: continued consolidation in the generic pharmaceuticals industry
      2. Chapter overview
      3. General tax considerations and issues
      4. Taxable transactions
      5. Tax-free transactions
      6. Other tax considerations affecting corporate restructuring
      7. Financial reporting of business combinations
      8. Impact of purchase accounting on financial statements
      9. International accounting standards
      10. Recapitalization accounting
      11. Some things to remember
      12. Chapter business cases
    4. Chapter 13. Financing Transactions
      1. Inside M&A: Kinder Morgan Buyout Raises Ethical Questions
      2. Chapter Overview
      3. Characterizing Leveraged Buyouts
      4. How do LBOS create value?
      5. When Do Firms Go Private?
      6. Financing Transactions
      7. Common Forms of Leveraged Buyout Deal Structures
      8. Prebuyout and Postbuyout Shareholder Returns
      9. Using DCF Methods to Value Leveraged Buyouts
      10. LBO Valuation and Structuring Model Basics
      11. Some Things to Remember
      12. Chapter Business Cases
  15. PART V. Alternative Business and Restructuring Strategies
    1. Introduction
    2. Chapter 14. Joint Ventures, Partnerships, Strategic Alliances, and Licensing
      1. Inside M&A: microsoft partners with yahoo! —an alternative to takeover?
      2. Chapter overview
      3. Motivations for business alliances
      4. Critical success factors for business alliances
      5. Alternative legal forms of business alliances
      6. Strategic and operational plans
      7. Resolving business alliance deal-structuring issues
      8. Empirical findings
      9. Some things to remember
      10. Chapter business cases
    3. Chapter 15. Alternative Exit and Restructuring Strategies
      1. Inside M&A: Bristol-Myers Squibb Splits off the Rest of Mead Johnson
      2. Chapter Overview
      3. Commonly Stated Motives for Exiting Businesses
      4. Divestitures
      5. Spin-Offs
      6. Equity Carve-Outs
      7. Split-Offs and Split-Ups
      8. Tracking, Targeted, and Letter Stocks
      9. Voluntary Liquidations (Bust-Ups)
      10. Comparing Alternative Exit and Restructuring Strategies
      11. Choosing among Divestiture, Carve-Out, and Spin-Off Restructuring Strategies
      12. Determinants of Returns to Shareholders Resulting from Restructuring Strategies
      13. Some Things to Remember
      14. Chapter Business Cases
    4. Chapter 16. Alternative Exit and Restructuring Strategies
      1. Inside M&A: calpine emerges from the protection of bankruptcy court
      2. Chapter overview
      3. Business failure
      4. Voluntary settlements with creditors outside of bankruptcy
      5. Reorganization and liquidation in bankruptcy
      6. Analyzing strategic options for failing firms
      7. Failing firms and systemic risk
      8. Predicting corporate default and bankruptcy
      9. Valuing distressed businesses
      10. Empirical studies of financial distress
      11. Some things to remember
      12. Chapter business cases
    5. Chapter 17. Cross-Border Mergers and Acquisitions
      1. Inside M&A: inbev buys an american icon for $52 billion
      2. Chapter overview
      3. Distinguishing between developed and emerging economies
      4. Globally integrated versus segmented capital markets
      5. Motives for international expansion
      6. Common international market entry strategies
      7. Structuring cross-border transactions
      8. Financing cross-border transactions
      9. Planning and implementing cross-border transactions in emerging countries
      10. Valuing cross-border transactions
      11. Empirical studies of financial returns to international diversification
      12. Some things to remember
      13. Chapter business cases
  16. Glossary
  17. Index