Applied International Corporate Finance

Dietmar Ernst; Joachim Häcker

doi:10.15358/9783800644636

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Bibliographic data

Copyright year: 2012
ISBN-Print: 978-3-8006-3751-5
ISBN-Online: 978-3-8006-4463-6
Publisher: Vahlen, München
Language: German
Pages: 515
Product type: Book Titles

Titelei/Inhaltsverzeichnis No access Pages I - XXI
1. 1. 1. 1.1.1 Mergers No access
    2. 1.1.2 Acquisitions No access
    3. 1. 1.1.3.1 Forms of business alliances No access
      2. 1.1.3.2 M&A versus business alliances No access
  2. 1.2 Reasons for and success factors of M&A No access
  3. 1. 1. 1.3.1.1 Increased public perception No access
      2. 1.3.1.2 Shareholder structure No access
      3. 1.3.1.3 The target company's share price as an uncertainty factor No access
      4. 1.3.1.4 The bidder company's share price as an uncertainty factor No access
    2. 1. 1.3.2.1 The regulations of § 93 AktG No access
      2. 1.3.2.2 The regulations of § 15 WpÜG No access
      3. 1.3.2.3 The regulations of § 21 WpHG No access
    3. 1. 1.3.3.1 Overview of the "Wertpapiererwerbs- und Übernahmegesetz" (WpÜG) (Security Purchase and Takeover Act) No access
      2. 1.3.3.2 The bid process according to the WpÜG No access
      3. 1.3.3.3 Squeeze out No access
  4. 1.4 The process of M&A No access
2. 1. 2.1 Pitch No access
  2. 1. 2.2.1 The discrete approach No access
    2. 2.2.2 Simultaneous bilateral negotiations No access
    3. 2.2.3 Controlled competitive auction No access
    4. 2.2.4 Full public auction No access
  3. 1. 2.3.1 MBO or MBI No access
    2. 2.3.2 Financial investors No access
    3. 2.3.3 Strategic investors No access
  4. 1. 2.4.1 Investment banks No access
    2. 2.4.2 Accountants and tax advisers No access
    3. 2.4.3 Lawyers No access
    4. 2.4.4 Other advisers No access
  5. 2.5 Mandate letter No access
  6. 2.6 Confidentiality agreement No access
3. 1. 1. 3.1.1 Anonymous short profile No access
    2. 3.1.2 Information memorandum No access
  2. 3.2 Non-binding offer No access
4. 1. 4.1 Due diligence No access
  2. 4.2 Valuation No access
  3. 4.3 Structuring No access
5. 1. 5.1 Negotiations No access
  2. 5.2 Binding offer No access
  3. 1. 5.3.1 Purchase agreement No access
    2. 5.3.2 Closing No access
1. 1. 1.1 Definitions No access
  2. 1. 1. 1.2.1.1 Seed financing No access
      2. 1.2.1.2 Start-up financing No access
      3. 1.2.1.3 First-stage financing No access
    2. 1. 1.2.2.1 Second-stage financing No access
      2. 1.2.2.2 Third-stage financing No access
      3. 1.2.2.3 Fourth-stage financing No access
  3. 1. 1.3.1 Expansion (development capital) No access
    2. 1.3.2 Bridge financing No access
    3. 1.3.3 Public-to-private (going private) No access
    4. 1.3.4 Succession planning and displacement of existing shareholders No access
    5. 1.3.5 Spin-off No access
    6. 1.3.6 Private placement No access
    7. 1.3.7 Turnaround No access
    8. 1.3.8 Platform strategy or buy and build strategy No access
  4. 1. 1.4.1 Open investments No access
    2. 1.4.2 Indirect investments No access
2. 1. 1. 2.1.1 Captive funds No access
    2. 2.1.2 Public funds No access
    3. 2.1.3 Independent funds No access
  2. 2.2 The role of banks in the private equity business No access
  3. 1. 2.3.1 New funds raised according to capital sources No access
    2. 2.3.2 Geographical distribution in Germany No access
    3. 2.3.3 New funds raised according to financing phases No access
    4. 2.3.4 Sectoral distribution of investment No access
3. 1. 1. 1. 3.1.1.1 Separation of fund and management No access
      2. 3.1.1.2 Subsidiaries No access
    2. 3.1.2 Management, control and advisory organs No access
    3. 3.1.3 Inner organization No access
  2. 1. 3.2.1 Basic types and significant parts of the contract No access
    2. 1. 3.2.2.1 Options No access
      2. 3.2.2.2 Pre-emptive right, right of first refusal, duty to supply information on offer No access
      3. 3.2.2.3 Take-along rights of managers No access
      4. 3.2.2.4 Drag-along rights No access
      5. 3.2.2.5 Exit/Liquidation proceeds preference No access
      6. 3.2.2.6 Antidilution clause No access
      7. 3.2.2.7 Concentration of corporate activities No access
      8. 3.2.2.8 Prohibition of competition and solicitation for seller No access
      9. 3.2.2.9 Provisions regarding exit No access
      10. 3.2.2.10 List of transactions requiring consent No access
      11. 3.2.2.11 Reporting duties No access
    3. 3.2.3 Adoption of existing contracts, important side contracts and covenants No access
    4. 3.2.4 Combined investment contracts No access
    5. 3.2.5 Participation in advisory and control organs No access
  3. 1. 1. 3.3.1.1 Derivation of the IRR No access
      2. 3.3.1.2 Calculating the IRR using standard spreadsheet software No access
      3. 3.3.1.3 Three levels of IRR advocated by EVCA No access
    2. 1. 3.3.2.1 Valuation principles No access
      2. 3.3.2.2 Valuation methodologies No access
4. 1. 1. 1. 4.1.1.1 Recruiting No access
      2. 4.1.1.2 Fund raising No access
    2. 1. 4.1.2.1 Deal-flow No access
      2. 4.1.2.2 Due diligence No access
      3. 4.1.2.3 Business plan No access
      4. 4.1.2.4 Investment negotiations No access
      5. 4.1.2.5 Investment support No access
      6. 4.1.2.6 Exit No access
  2. 1. 4.2.1 Quality controls in the project examination area No access
    2. 4.2.2 Setting of competences and decision levels No access
    3. 4.2.3 Selection of projects according to the criteria of company size No access
    4. 4.2.4 Risk limitation through syndication No access
    5. 4.2.5 Risk limitation through specialization No access
  3. 4.3 Investment purchase abroad No access
  4. 1. 4.4.1 Governing principles No access
    2. 1. 4.4.2.1.1 Early stage planning No access
        4.4.2.1.2 Investors and marketing No access
        4.4.2.1.3 Structuring No access
      2. 4.4.2.2.1 Initiators No access
        4.4.2.2.2 Target investors No access
        4.4.2.2.3 Origin of funds No access
        4.4.2.2.4 Investors No access
        4.4.2.2.5 Structure of the offer: terms of investment No access
        4.4.2.2.6 Structure of the documentation No access
        4.4.2.2.7 Presentation to investors No access
        4.4.2.2.8 Track records and forecasts No access
        4.4.2.2.9 Time period for fundraising No access
      3. 4.4.2.3.1 Due diligence No access
        4.4.2.3.2 Investment decision No access
        4.4.2.3.3 Structuring investment No access
        4.4.2.3.4 Possible means by which the fund may influence an investee business No access
        4.4.2.3.5 Investment agreements and documents No access
        4.4.2.3.6 Manager's consent to investee business actions No access
        4.4.2.3.7 Cooperation with co-investors and syndicate partners No access
        4.4.2.3.8 Co-investment and parallel investment by the manager and executives No access
        4.4.2.3.9 Co-investment and parallel investments by fund investors and other third parties No access
        4.4.2.3.10 Divestment planning No access
      4. 4.4.2.4.1 Investment monitoring No access
        4.4.2.4.2 Exercise of investor consents No access
        4.4.2.4.3 Follow-on investments No access
        4.4.2.4.4 Under-performing investments No access
        4.4.2.5.1 Implementation of divestment planning No access
        4.4.2.5.2 Responsibility for divestment decision-making No access
        4.4.2.5.3 Warranties and indemnities No access
        4.4.2.5.4 Should cash always be taken on realization or can shares/earn-outs be accepted? No access
        4.4.2.5.5 Sales to another fund managed by the same manager No access
        4.4.2.5.6 Managing quoted investments No access
        4.4.2.6.2 Timing of distributions No access
        4.4.2.7.1 Reporting obligations No access
        4.4.2.7.2 Transparency No access
        4.4.2.7.3 Investor relations No access
        4.4.2.7.4 Investors' committee No access
        4.4.2.8.1 Liquidation No access
        4.4.2.8.2 Fund documentation No access
        4.4.2.9.1 Conflicts of interest No access
        4.4.2.9.2 Establishment of new funds No access
        4.4.2.10.1 Human resources No access
        4.4.2.10.2 Incentivization No access
        4.4.2.10.3 Financial resources No access
        4.4.2.10.4 Procedures and organization No access
        4.4.2.10.5 Segregation of fund assets No access
        4.4.2.10.6 Internal reviews and controls No access
        4.4.2.10.7 External assistance No access
        4.4.2.11 List of questions addressed in 'Examples' section No access
1. 1. 1.1 Definition and challenges No access
  2. 1.2 The challenges of acquisition financing No access
  3. 1. 1.3.1 Management buy-out (MBO) No access
    2. 1.3.2 Management buy in (MBI) No access
    3. 1.3.3 Leveraged buy-out (LBO) No access
2. 1. 1. 2.1.1 Senior partners No access
    2. 2.1.2 Strategic investors No access
    3. 2.1.3 Financial investors (private equity investors) No access
    4. 2.1.4 Management No access
    5. 2.1.5 Financial institutions No access
    6. 2.1.6 Advisors No access
  2. 1. 2.2.1 Low debt capital ratio No access
    2. 2.2.2 Collateral No access
    3. 2.2.3 Marketability – loan syndication No access
    4. 2.2.4 Return on debt No access
  3. 1. 2.3.1 Return on equity No access
    2. 2.3.2 Limited liability No access
    3. 2.3.3 Contract flexibility No access
    4. 2.3.4 Minimum expenses No access
3. 1. 3.1 Functionality of leveraged buy-outs No access
  2. 3.2 Exploiting the leverage effect No access
  3. 1. 3.3.1 Fixed assets and working capital optimization No access
    2. 3.3.2 Strategic reorientation of the enterprise No access
    3. 3.3.3 Efficient capital allocation No access
    4. 3.3.4 Know-how transfer by financial investors No access
    5. 3.3.5 Elimination of underperformance in the enterprise No access
    6. 3.3.6 Asset stripping No access
  4. 1. 3.4.1 Increase purchase price multiple due to improved returns and profits No access
    2. 3.4.2 Increase purchase price multiple due to an optimized firm size No access
  5. 1. 3.5.1 Attractive LBO market environment No access
    2. 3.5.2 LBO proficient company No access
    3. 3.5.3 Exit possibilities and increase in company value No access
    4. 3.5.4 Management No access
    5. 3.5.5 Track record and firm ethics of financial investor No access
    6. 3.5.6 Fair price No access
    7. 3.5.7 Fiscal optimization No access
    8. 3.5.8 Feasible and sustainable financing structure No access
4. 1. 1. 4.1.1 Three-step takeover approach No access
    2. 4.1.2 Respective interests of equity capital investors No access
    3. 4.1.3 Respective interests of debt capital investors No access
    4. 4.1.4 Legal restrictions No access
  2. 4.2 Asset deal vs.share deal No access
  3. 4.3 Acquisition financing – structuring the financing tools No access
5. 1. 5.1 Determination of the debt service ability No access
  2. 1. 5.2.1 Share capital No access
    2. 5.2.2 Shareholder loans No access
  3. 1. 5.3.1 Senior term debt No access
    2. 5.3.2 Working capital facilities No access
  4. 1. 5.4.1 Particular characteristics of mezzanine capital No access
    2. 1. 5.4.2.1 Mezzanine capital – bridging the gap No access
      2. 5.4.2.2 Mezzanine capital – payment structure and yield expectations No access
      3. 5.4.2.3 Mezzanine capital – contractual structuring No access
    3. 1. 5.4.3.1 Equity mezzanine instruments No access
      2. 5.4.3.2 Debt mezzanine instruments No access
  5. 5.5 Capital structure and key figures No access
6. 1. 1. 6.1.1 Precedent conditions No access
    2. 6.1.2 Representations and warranties No access
    3. 6.1.3 Covenants No access
  2. 6.2 Collateral agreement No access
  3. 6.3 Consortium agreement No access
  4. 6.4 Intercreditor agreement No access
  5. 6.5 Purchase agreement No access
7. 1. 1. 7.1.1 Business plan No access
    2. 7.1.2 Due diligence No access
    3. 7.1.3 Financing case No access
    4. 7.1.4 Financing structure and term sheet No access
    5. 7.1.5 Commitment letter No access
    6. 7.1.6 Contract documentation No access
    7. 7.1.7 Syndication No access
    8. 7.1.8 Deal signing and closing No access
  2. 7.2 Post-deal monitoring No access
1. 1. 1.1 Definition and reasons for an IPO No access
  2. 1. 1.2.1 Benefits and opportunities No access
    2. 1.2.2 Drawbacks and continuing obligations No access
  3. 1.3 Pre-IPO strategy No access
2. 1. 1. 1. 2.1.1.1 Stock corporation No access
      2. 2.1.1.2 Financial reporting No access
      3. 2.1.1.3 Business plan No access
    2. 2.1.2 Equity story No access
    3. 2.1.3 Issue concept No access
  2. 1. 1. 2.2.1.1 Coordinators No access
      2. 2.2.1.2 Syndicate structure No access
      3. 2.2.1.3 Designations No access
      4. 2.2.1.4 Beauty contest and selection criteria No access
      5. 2.2.1.5 Agreements with coordinators No access
      6. 2.2.1.6 Underwriting commissions No access
    2. 2.2.2 IPO consultants No access
    3. 2.2.3 Legal advisers No access
    4. 2.2.4 Auditors and tax advisers No access
    5. 2.2.5 IR/PR agencies No access
    6. 2.2.6 Due diligence No access
    7. 2.2.7 Valuation No access
    8. 2.2.8 Prospectus No access
    9. 2.2.9 Corporate governance No access
  3. 1. 2.3.1 Investor relations No access
    2. 1. 2.3.2.1 Analyst meetings No access
      2. 2.3.2.2 Research No access
    3. 2.3.3 Road show No access
  4. 1. 1. 2.4.1.1.1 Fixed-price method No access
        2.4.1.1.2 Bookbuilding No access
      2. 2.4.1.2 Pricing structure No access
      3. 2.4.1.3 Pricing mechanism No access
    2. 1. 2.4.2.1 Allocation to institutional investors No access
      2. 2.4.2.2 Allocation to retail investors No access
      3. 2.4.2.3 Employee equity compensation programs No access
      4. 2.4.2.4 Friends & family program No access
    3. 1. 2.4.3.1 Greenshoe (over-allotment option) No access
      2. 2.4.3.2 Naked short No access
      3. 2.4.3.3 Naked long No access
  5. 1. 2.5.1 Ad-hoc disclosures No access
    2. 2.5.2 Insider information and compliance No access
    3. 2.5.3 Transparency for capital markets No access
    4. 2.5.4 Annual financial statements and quarterly reports No access
    5. 2.5.5 Analyst conferences and research No access
    6. 2.5.6 Corporation action timetable No access
  6. 4.5.7 Investor relations No access
1. 1. 1.1 Definition of going private No access
  2. 1. 1.2.1 Going dark No access
    2. 1.2.2 Similarities and differences between going private and going dark No access
  3. 1. 1.3.1 Reasons for going private No access
    2. 1.3.2 Benefits of going private No access
    3. 1.3.3 Risks of going private No access
  4. 1.4 Candidates for going private transactions No access
  5. 1.5 Recent transactions in the U.S., U.K. and Germany No access
2. 1. 2.1 What is the legal framework of going private transactions in Germany? No access
  2. 1. 2.2.1 Ex officio delisting No access
    2. 2.2.2 Hot delisting No access
    3. 1. 2.2.3.1 Squeeze-out No access
      2. 2.2.3.2 Integration No access
      3. 2.2.3.3 Conversion, merger and corporate division No access
      4. 2.2.3.4 Liquidation and sale of all assets No access
1. 1. 1.1 Definition of the term due diligence No access
  2. 1.2 Motives for conducting a due diligence No access
  3. 1. 1.3.1 Reducing the information asymmetry No access
    2. 1.3.2 Identifying and examining the synergy potential No access
    3. 1.3.3 Linking the strategic preparation with the integration period No access
    4. 1.3.4 Providing reps and warranties No access
  4. 1.4 Participants in the due diligence process No access
  5. 1. 1. 1.5.1.1 The data room No access
      2. 1.5.1.2 Interviewing the management No access
      3. 1.5.1.3 Site visits No access
    2. 1.5.2 External sources of information No access
2. 1. 2.1 The data room No access
  2. 1. 2.2.1 Corporate organization No access
    2. 2.2.2 Employees No access
    3. 2.2.3 Litigation No access
    4. 2.2.4 Pensions No access
    5. 2.2.5 Taxation No access
    6. 2.2.6 Agreements No access
    7. 2.2.7 Insurances No access
    8. 2.2.8 Financial documents No access
    9. 2.2.9 Intellectual property No access
    10. 2.2.10 Property No access
    11. 2.2.11 Products/services/technology No access
3. 1. 1. 3.1.1 Assessing the target company's forecasting process No access
    2. 3.1.2 Steps for formulating a business plan No access
    3. 3.1.3 What happens with the business plan? No access
    4. 3.1.4 Challenging the business plan No access
  2. 1. 3.2.1 Assessing internal controls No access
    2. 3.2.2 Assessing annual reports No access
  3. 1. 3.3.1 The legal foundation No access
    2. 3.3.2 The legal risk factors No access
    3. 3.3.3 The internal legal structure No access
    4. 3.3.4 The external legal structure No access
  4. 1. 3.4.1 The scope of the tax due diligence No access
    2. 3.4.2 Past periods that were not covered by tax audits No access
1. 1. 1.1 Valuation methods at a glance No access
  2. 1.2 Occasions and purposes of valuation No access
  3. 1. 1.3.1 Valuation: art or science? No access
    2. 1.3.2 Value vs.price No access
2. 1. 2.1 Valuation techniques No access
  2. 1. 2.2.1 Net asset value based on reproduction values No access
    2. 2.2.2 Net asset value based on liquidation values No access
  3. 2.3 The Automotive Supplier Case Study No access
3. 1. 1. 3.1.1 The WACC approach No access
    2. 3.1.2 Adjusted present value (APV) approach No access
    3. 3.1.3 Equity approach (net approach) No access
  2. 1. 3.2.1 Calculation of the operating free cash flows according to the WACC approach and the APV approach No access
    2. 3.2.2 Calculation of the flows to equity in the equity approach No access
    3. 1. 3.2.3.1 The two-phase model for the determination of the value of a company with infinite lifetime No access
      2. 3.2.3.2 Determination of the terminal value No access
      3. 3.2.3.3 Determination of the detail planning horizon (detail planning period) No access
  3. 1. 3.3.1 Determination of the discount rate subject to the respective DCF method No access
    2. 1. 3.3.2.1 Determination of the current capital structure No access
      2. 3.3.2.2 Target capital structure No access
    3. 1. 3.3.3.1 Determination of the interest rate of a risk-free investment No access
      2. 3.3.3.2.1 Systematization of risks No access
        3.3.3.2.2.1 Market risk premium No access
        3.3.3.2.2.2 Significance of the Beta factor No access
        3.3.3.2.2.3 Structure of the Beta factor (dependence of the Beta factor on the leverage) No access
        3.3.3.2.2.4 Determination of the Beta factor out of past values No access
        3.3.3.2.2.5 Beta factors for non-publicly listed companies No access
        3.3.3.2.2.6 Determination of Beta factors for conglomerates No access
        3.3.3.2.2.7 Estimation of future Beta factors No access
        3.3.3.2.2.8 Model assumptions of the CAPM No access
        3.3.3.2.3.1 Agios for the unsystematic risk No access
        3.3.3.2.3.2 Mobility agio (liquidity agio, fungibility agio) No access
        3.3.3.2.3.3 Agio for personal liability No access
        3.3.3.2.3.4 Majority disagio (package agio) No access
    4. 1. 3.3.4.1 But where can the information on the risk premium which is currently valid in the market be obtained? No access
  4. 3.4 Calculation of the enterprise value No access
  5. 3.5 Period-specific WACC No access
4. 1. 1. 4.1.1 The procedure of multiples valuation No access
    2. 4.1.2 Creation of multiples No access
    3. 4.1.3 Calculation of the company value No access
  2. 1. 4.2.1 Equity value vs.entity value multiples No access
    2. 4.2.2 Trading vs.transaction multiples No access
    3. 4.2.3 Overview of the different multiples No access
    4. 4.2.4 Multiples based on balance sheet figures – price-book-value No access
    5. 1. 4.2.5.1 Sales multiples No access
      2. 4.2.5.2 EV/EBITDA multiple No access
      3. 4.2.5.3 EV/EBITA multiple No access
      4. 4.2.5.4 EV/EBIT multiple No access
      5. 4.2.5.5 Price-earnings-ratio No access
    6. 4.2.6 Cash flow multiples No access
    7. 4.2.7 Non-financial multiples No access
    8. 4.2.8 Consideration of growth No access
  3. 1. 4.3.1 Selection of the peer companies No access
    2. 4.3.2 Selection of the valuation period No access
    3. 4.3.3 Selection of the multiple No access
    4. 1. 4.3.4.1 Market value of the equity and enterprise value No access
      2. 4.3.4.2 Determination of the reference figures: annual report figures No access
      3. 4.3.4.3 Determination of the reference figures: estimations No access
    5. 1. 4.3.5.1 Market value of the equity No access
      2. 4.3.5.2 Enterprise value No access
      3. 4.3.5.3.1 Determination of the reference figures of the single multiples from the annual report figures No access
        4.3.5.3.2 Calculation of the multiples No access
      4. 4.3.5.4.1 Collection of the estimations No access
        4.3.5.4.2 Verification of the estimations No access
        4.3.5.4.3 Interpolation in case of a business year deviating from the calendar year No access
        4.3.5.4.4 Calculation of the multiples No access
    6. 1. 4.3.6.1 Consideration of minority interests in the example of Peugeot and Faurecia No access
      2. 4.3.6.2 Consideration of non-consolidated participations based on the example of Renault and Nissan No access
  4. 1. 4.4.1 Determination of the peer companies' multiples No access
    2. 4.4.2 Aggregation of the multiples No access
    3. 4.4.3 Calculation of the company value of Automotive Supplier GmbH No access
5. 1. 5.1 Valuation conception No access
  2. 5.2 Prevalence and application of the valuation method No access
  3. 1. 5.3.1 Preferred multiples No access
    2. 1. 5.3.2.1 Company-specific factors No access
      2. 5.3.2.2 Transaction-specific factors No access
    3. 1. 5.3.3.1 Calculation of the transaction multiples No access
      2. 5.3.3.2 Financial data of the valuation object No access
  4. 1. 5.4.1 The relevance of the sector and the regional presence for transaction multiples No access
    2. 5.4.2 Reasons and implications No access
  5. 1. 5.5.1 Significance of the takeover premium No access
    2. 1. 5.2.2.1 Undervaluation of the target company No access
      2. 5.2.2.2 Compensation of synergy effects No access
      3. 5.2.2.3 Manager hybris No access
      4. 5.5.2.4 Control premium No access
      5. 5.2.2.5 Bidder competition vs.exclusive negotiations No access
  6. 5.6 Case study No access
  7. 5.7 Critique of the valuation methodology No access
Index No access Pages 514 - 515