Formation modélisation d’une acquisition

Training provided by Ferdinand Petra (in English or French)

1.Why companies decide to pursure Mergers & Acquisitions (« M&A »)?

  • Three bad reasons (CEO human nature, diversification, the P/E game)
  • Two good reasons (synergies and growth)
  • Classification of synergies and how to value them (DCF, multiples)
  • Different types of M&A operations
  • Acquisition vs. Merger Of Equals (MoE)

2. Analysis of an acquisition

  • What is a merger analysis?
  • Key results from such analysis
  • Overview of the methodology
  • Buil up of financial statement for the acquirer and the target
  • Valuation key points and market data needed
  • Transaction and financing assumptions
  • Source & Uses of funds
  • Computation of pro-forma number of shares of the acquirer and computation of the potential patrimonial dilution
  • EPS accretion/dilution computation & sensitivities
  • Computation of synergies to break-even if need be
  • Goodwill computation
  • Transaction impact on the acquirer’s balance sheet
  • Transaction impact on the credit rating of the acquirer
  • Relative P/E rules
  • Analysis at various price
  • Contribution analysis
  • Side-by-side analysis
  • Analysis of premium paid  vs. present value of the net synergies
  • Transaction impact on the acquirer’s ROCE (return on capital employed)
  • What financing mix to choose for an M&a operation?
  • Indicative method to choose the right financing mix depending on the acquirer’s constraints
  • What is the maximum price an acquirer can pay for a target?

3. Advanced modelling of an M&A transaction

  • Case where less than 100% of the share capital is acquired in a target company
    • Transaction impact on the acquirer’s income statement, including EPS accretion/dilution analysis
    • Two methods to compute goodwill
    • Transaction impact on the acquirer’s balance sheet
    • Transaction impact on the acquirer’s cash flow statement
  • Case of the creation of a Joint Venture
    • Accounting treatment of a joint venture
    • Joint Venture’s governance issues
    • Possible exits from a Joint Venture
  • Case of the purchase of a minority stake in a target with a path to control through call options

A more advanced financial model can be included in order to compute forward credit ratios and forward EPS accretion/dilution more accurately.