CORPORATE LAW
CORPORATE VALUATION IN MERGERS AND ACQUISITIONS
Samuel C . Thompson , Jr . ( Center for the Study of Mergers and Acquisitions , Penn State Law , Pennsylvania State University )
This treatise empowers readers with the necessary understanding and insight needed to evaluate and navigate M & A transactions . Crafted by a team of proficient M & A specialists , the book explores the intricate terrain of valuation in M & A , outlining vital regulatory principles and common pitfalls .
Professionals involved in M & A will find this book an indispensable tool as it provides detailed insights into various valuation techniques , including relative valuation , arbitrage pricing , and Adjusted Present Value models . Readers will receive comprehensive instructions on issues including due diligence , value determination , and the role of key players in M & A transactions . Necessary forms , registration details , and organizational documentation pertaining to valuation are also provided for practical reference .
Remain proactive in the rapidly evolving M & A landscape through PLI ’ s upkeep service .
1 looseleaf volume , 1,382 pages , $ 595 , Item # 319971 , ISBN 978-1-4024-3951-3 , Updated annually or as needed
CONTENTS
PART 1 : GENERAL INTRODUCTORY DISCUSSION OF ECONOMIC , FINANCE , LEGAL , AND FINANCIAL ACCOUNTING CONSIDERATIONS IN PUBLIC COMPANY M & A 1 Introduction to ( 1 ) the Valuation of the Target in an M & A Transaction , and ( 2 ) Basic Business , Legal and Regulatory M & A Principles 2 Introduction to the Economics and Finance of M & A 3 Introduction to ( 1 ) Financial Accounting Relating Principally to M & A , ( 2 ) Financial Statement Analysis , and ( 3 ) Valuation Due Diligence
PART 2 : EXAMINATION OF THE DISCOUNTED CASH FLOW ( DCF ) TECHNIQUE 4 DCF : Introduction and the Seven-Step DCF Process for Determining a Target ’ s Value 5 DCF , Sub-Steps 1A and 1B : Computation of the Target ’ s Periodic
Free Cash Flows : An Element of the DCF Numerator 6 DCF , Sub-Step 1C : Computation of a Target ’ s Terminal Value :
An Element of the DCF Numerator 7 DCF , Sub-Step 2A : Computation of CAPM ’ s Risk-Free Rate and
Market Risk Premium 8 DCF , Sub-Step 2B : Computation of CAPM ’ s Beta for the Target ,
Including the Levering and Unlevering of the Beta
9 DCF , Sub-Step 2C : Bringing the Elements of CAPM Together : Computation of the Target ’ s Cost of Equity , an Element of the WACC and the DCF Denominator , with Potential Adjustments for a Size Premium and Company-Specific Risk
10 DCF , Sub-Step 2D : Introduction to the Computation of the Costs of ( 1 ) Debt , and ( 2 ) Preferred Stock , Elements of the WACC and the DCF Denominator
11 DCF , Sub-Step 2E : Computation of the Discount Rate Under the WACC
12 DCF , Third , Fourth , and Fifth Steps : Putting the DCF Model All Together : Determining the Value of the Target ’ s Operating Assets by Discounting the Target ’ s Free Cash Flows and Terminal Value to Present Value at the WACC
13 DCF , Sixth and Seventh Steps : Computation of the Target ’ s per Share Value by Adjusting the DCF Valuation to Account for , Inter Alia , the Target ’ s ( 1 ) Non-Operating Assets , Including Excess Cash and Marketable Securities , ( 2 ) Cross-Holdings , and ( 3 ) Employee Stock Options
14 The “ Corporate Valuation in M & A Seven-Step DCF Model ” ( the CVM & A Seven-Step DCF Model ) for the Valuation of a Target
PART 3 : THE COMPARABLE COMPANIES AND COMPARABLE TRANSACTIONS TECHNIQUES , THAT IS , RELATIVE VALUATION TECHNIQUES 15 Introduction to the Relative Valuation Techniques : Comparable
Companies and Comparable Transactions 16 Elaboration on the Comparable Companies Approach : Valuation of
RAI in the Seven Comparable Company Steps 17 Elaboration on the Comparable Transactions Approach : Valuation of
RAI in the Seven Comparable Transaction Steps
PART 4 : SPECIAL TOPICS IN VALUATION 18 Introduction to Valuation Issues in Management-Led Leveraged
Buyouts of Publicly Held Companies ( MBOs ) 19 Brief Introduction to Valuation of a Target That Is a Commercial Bank 20 Brief Introduction to Other Valuation Methods , Including the Arbitrage
Pricing and Adjusted Present Value Models
Table of References Table of Cases Index
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