Fusions et Acquisitions

Professor: Christian Turbé (CFM Ag)

Description :

• An introductory historical overview of the M&A market and a review of several emblematic transactions aim at identifying the strategic rationale, drivers and risks associated to M&A transactions.
• Focus is then made on the importance of a structured process to increase the chances of success of a deal, whether Buy-side or Sell-side. As a key step of this process, the due diligence phase is presented as a mean to not only identify the key risks but also to validate the strategic goals as well as for preparing the post acquisition integration of a M&A transaction.
• The key characteristics of the multiples and DCF valuation methods are presented to understand what is effectively measured by each method, how and when to apply them and their limitations.

Required prerequisites :

• Knowledge of accounting: balance sheet, P&L, CF statement, debt and capital instruments
• Principles of Corporate Finance: working capital, working capital needs, cash-flow, present value,
• Mathematics: arithmetic and geometric progressions, geometric and weighted average
• Active participation

What will the students be able to do at the end of the course?

• Understand the various forms of M&A transaction, their respective characteristics and when to use them
• Understand the importance of a structured M&A process: phases and their components, role and objectives
• Be acquainted with the main corporate valuation methods: characteristics, respective strengths and limitations, when and how to use them.
• Be able to perform a high level corporate valuation by using multiple and DCF methods

Key concepts :

Merger, acquisition, asset deal, share deal, Buy-side, Sell-side, Teaser, Memorandum of Information, equity story, Enterprise Value, Equity Value, trading multiples, comparables, Discounted Cash-Flows, Free Cash-Flows, Terminal value, Weighted Average Cost of Capital, perpetual growth rate, Due Diligence, Post Acquisition Integration

Summary:

1. Introduction
− Historical overview of the M&A market. The M&A market today: volumes, transaction and geographies
− Drivers of the M&A market: legal & tax, economic cycle, technology, financial markets
− Learnings from key historical M&A transactions in : timing, strategic rationale, integration

2. Forms of M&A transaction
− Merger, Acquisition, Share deal, Asset deal

3. M&A and Strategy. M&A deals conceived as a tool to reach a strategic objective of the firm
− The different strategic motivations of a M&A deals and alternatives to them

4. Process of an M&A transaction (Buy-side and Sell-side)
− The process as a mean to increase the chances of success
− Components and goals of each phase of an M&A process.
− Focus on the due diligence phase: financial, operational, commercial, Human and cultural

5. Valuation of a firm:
− Multiples: Trading and comparables
− DCF and DDM

6. The structuring and negotiation of a transaction:
− Structuring a transaction: legal, tax, finance aspects
− Documentation : standard clauses of a share purchase agreement and shareholder agreement
− Negotiating a transaction