Valuation for M&a : Building and Measuring Private Company Value.

Cover -- Title Page -- Copyright -- Contents -- Preface -- Dedication and Acknowledgments -- Part I Introduction -- Chapter 1 Winning through Mergers and Acquisitions -- Critical Values Shareholders Overlook -- Stand-Alone Fair Market Value -- Investment Value to Strategic Buyers -- Win-Win Benefits of Merger and Acquisition -- Computation of Cavendish's Stand-Alone, Fair Market Value -- Investment Value to Strategic Buyer -- Part II Building Value -- Chapter 2 Building Value and Measuring Return on Investment in a Private Company -- Public Company Value Creation Model -- Computing Private Company Value Creation and ROI -- Analyzing Value Creation Strategies -- Chapter 3 Market and Competitive Analysis -- Linking Strategic Planning to Building Value -- Assessing Specific Company Risk -- Competitive Factors Frequently Encountered in Nonpublic Entities -- Financial Analysis -- Conclusion -- Chapter 4 Merger and Acquisition Market and Planning Process -- Common Seller and Buyer Motivations -- Why Mergers and Acquisitions Fail -- Sales Strategy and Process -- Acquisition Strategy and Process -- Due Diligence Preparation -- Chapter 5 Measuring Synergies -- Synergy Measurement Process -- Key Variables in Assessing Synergies -- Synergy and Advance Planning -- Part III Measuring Value -- Chapter 6 Valuation Approaches and Fundamentals -- Business Valuation Approaches -- Using the Invested Capital Model to Define the Investment Being Appraised -- Why Net Cash Flow Measures Value Most Accurately -- Frequent Need to Negotiate from Earnings Measures -- Financial Statement Adjustments -- Managing Investment Risk in Merger and Acquisition -- Conclusion -- Chapter 7 Income Approach: Using Expected Future Returns to Establish Value -- Why Values for Merger and Acquisition Should Be Driven by the Income Approach -- Two Methods within the Income Approach.

Three-Stage DCF Model -- Establishing Defendable Long-Term Growth Rates and Terminal Values -- DCF Challenges and Applications -- Chapter 8 Cost of Capital Essentials -- Cost of Debt Capital -- Cost of Preferred Stock -- Cost of Common Stock -- Fundamentals and Limitations of the Capital Asset Pricing Model -- Modified Capital Asset Pricing Model -- Build-Up Model -- Summary of Rate of Return Data -- Private Cost of Capital -- International Cost of Capital -- How to Develop an Equity Cost for a Target Company -- Reconciling Discount Rates and P/E Multiples -- Conclusion -- Appendix 8A Using Specific Company Risk Strategically -- Chapter 9 Weighted Average Cost of Capital -- Iterative Weighted Average Cost of Capital Process -- Shortcut Weighted Average Cost of Capital Formula -- Common Errors in Computing Cost of Capital -- Chapter 10 Market Approach: Using Guideline Public Companies and M&amp -- A Transactions -- Transaction Multiple Method -- Guideline Public Company Method -- Selection of Valuation Multiples -- Commonly Used Market Multiples -- Chapter 11 Asset Approach -- Book Value versus Market Value -- Premises of Value -- Use of the Asset Approach to Value Noncontrolling Interests -- Adjusted Book Value Method -- Specific Steps in Computing Adjusted Book Value -- Chapter 12 Adjusting Value through Premiums and Discounts -- Applicability of Premiums and Discounts -- Application and Derivation of Premiums and Discounts -- Apply Discretion in the Size of the Adjustment -- Control versus Lack of Control in Income-Driven Methods -- Fair Market Value versus Investment Value -- Chapter 13 Reconciling Initial Value Estimates and Determining Value Conclusion -- Essential Need for Broad Perspective -- Income Approach Review -- Market Approach Review -- Asset Approach Review -- Value Reconciliation and Conclusion -- Checks to Value.

Candidly Assess Valuation Capabilities -- Valuation Scenarios - Platform for M&amp -- A -- Appendix 13A Disciplined and Thorough Valuation Analysis Key to Avoiding Failed M&amp -- A Deals -- Analysis of a Hypothetical Synergistic Deal -- Establishing the Value of an Acquisition Target -- Establishing Value for the Acquirer -- Considerations of Other Impacts on Value -- Part IV Specialty Issues -- Chapter 14 Exit Planning -- Why Is Exit Planning So Difficult? -- What Makes Planning for Your Private Company Investment Unique? -- Why Should Exit Planning for Your Private Company Begin Now? -- Exit Planning Process -- Step 1: Setting Exit Goals -- Step 2: Owner Readiness -- Step 3: Type of Exiting Owner -- Step 4: Exit Options -- Step 5: Range of Values -- Step 6: Execution of Exit Plan -- Chapter 15 Art of the Deal -- Unique Negotiation Challenges -- Deal Structure: Stock versus Assets -- Asset Transaction -- Terms of Sale: Cash versus Stock -- Personal Goodwill -- Bridging the Gap -- See the Deal from the Other Side -- Chapter 16 Fairness Opinions -- Why Are Fairness Opinions Obtained? -- The Use of Fairness Opinions by Private Companies -- Parties Who Prepare Fairness Opinions -- Components of a Fairness Opinion -- What Fairness Opinions Are Not -- Conclusion -- Appendix 16A Sample Fairness Opinion Letter -- Chapter 17 M&amp -- A and Financial Reporting -- U.S. GAAP and IFRS -- Relevant FASB and IFRS Statements -- Reviews by the Audit Firm -- ASC 820: Fair Value Measurements -- ASC 805: Business Combinations -- ASC 350: Goodwill and Other Intangible Assets -- Incorporating ASC 805 into the Due Diligence Process -- References -- Chapter 18 Intangible Asset Valuation -- Approaches to Valuing Intangible Assets -- Key Components to Intangible Asset Valuation -- Intangible Asset Valuation Methods -- Conclusion.

Chapter 19 Measuring and Managing Value in High-Tech Start-Ups -- Why Appraisals of High-Tech Start-Ups Are Essential -- Key Differences in High-Tech Start-Ups -- Value Management Begins with Competitive Analysis -- Stages of Development -- Risk and Discount Rates -- Start-Ups and Traditional Valuation Methods -- QED Survey of Valuation Methods Used by Venture Capitalists -- A Probability-Weighted Scenario Method to Value Start-Ups -- Equity Allocation Methods -- Conclusion -- Chapter 20 Cross-Border M&amp -- A -- Strategic Buy-Side Considerations -- Due Diligence -- Sell-Side Considerations -- Part V Case Studies -- Chapter 21 Merger and Acquisition Valuation Case Study - Distribution Company -- History and Competitive Conditions -- Potential Buyers -- General Economic Conditions -- Specific Industry Conditions -- Growth -- Computation of the Stand-Alone Fair Market Value -- Risk and Value Drivers -- Summary and Conclusion of Stand-Alone Fair Market Value -- Computation of Investment Value -- Suggested Considerations to Case Conclusion -- Chapter 22 Merger and Acquisition Valuation Case Study - Professional Services Firm -- Characteristics -- Valuation Methods -- Case Study Introduction -- Potential Buyer -- Historic Financial Performance -- Future Expectations -- Risk and Value Drivers -- Discounted Cash Flow Method -- Other Valuation Methods to Consider -- Suggested Considerations to Case Conclusion -- About the Authors -- Glossary -- Index -- EULA.

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Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2024. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.