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Corporate Valuation – Merger Consequences Analysis
Merger consequences analysis is often referred to as an affordability analysis because it is used to determine what an acquirer could pay for a possible target. In this course, you will learn how to perform the mechanics of a merger consequences analysis. This includes determining the proposed transaction’s impact on EPS (accretion/dilution) and credit statistics.
On completion of this course, you will be able to:
• Recognize the importance of affordability analysis by evaluating the possible accretion/dilution and the impact on the acquirer’s credit rating
• Describe the fundamentals of purchase accounting, especially the creation of goodwill
• Calculate the EPS impact of a transaction and the possible impact on credit statistics
• Evaluate whether a transaction is accretive or dilutive by comparing the acquirer’s price/earnings (P/E) multiple to the offer P/E multiple
• Outline other common complexities and considerations that arise in merger consequences analysis
Topic 1: Overview of Merger consequences
• What is a Merger Consequences Analysis?
• Determining Affordability
Topic 2: Fundamentals of Purchase Accounting
• What is Purchase Accounting?
• Alternative Way of Calculating Goodwill
• Goodwill Creation – A Real Life Example
• Convergence of Global Accounting Standards
Topic 3: Transaction Adjustments
• 100% Stock Purchase
• 100% Cash Purchase
• Balance Sheet Affordability
o Pro Forma Debt
o Pro Forma Interest Expense
o Pro Forma EBITDA
Topic 4: Other Analyses & Considerations
• What are other Analyses & Considerations?
o Combination of Cash & Stock
o Impact of Synergies on Pro Forma Earnings
o Incremental Depreciation or Amortization from Write-Ups
o Exchange Ratio Analysis
o Pro Forma Ownership
o Tax Considerations (US Corporate Tax Law)
o Qualitative Issues
Topic 5: Relative P/Es
• What are Relative P/Es?
• Relative P/Es – An Example
Prior to studying this course, you should have a basic knowledge of corporate valuation as described in the following course:
Corporate Valuation – An Overview - View Now
ESTIMATED COMPLETED TIME
Corporate Valuation - Leveraged Buyout (LBO) Analysis
In this course, you will learn how to perform the mechanics of an LBO analysis. This includes determining the contemplated transaction’s implications for each of the stakeholders.
Other Courses In:
Corporate Valuation - An Overview
Corporate Valuation - Public Comparables Analysis
Corporate Valuation - Acquisition
Corporate Valuation - Discounted Cash Flow
Corporate Valuation - Leveraged Buyout
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