Investment Banking, 3rd Edition

Book description

An essential, all-in-one guide to investment banking and valuation, complete with downloadable models – this new edition reflects valuable contributions from Nasdaq and the global law firm Latham & Watkins LLP plus access to the online valuation models and course.

The thoroughly revised Third Edition of Investment Banking: Valuation, LBOs, M&A, and IPOs (Book + Valuation Models) delivers the most current discussion of valuation and deal-making fundamentals essential to the work of investment bankers, private equity professionals, hedge fund investors, corporate lawyers, executives, and students. Drawing on over four decades of combined experience in investment banking and investing, authors Joshua Rosenbaum and Joshua Pearl explain how to perform the valuation work and financial analysis at the core of Wall Street – comparable companies, precedent transactions, DCF, LBO, M&A analysis...and now IPO analytics and valuation. Using a step-by-step, how-to approach for each methodology, the authors build a chronological knowledge base and define key terms, financial concepts, and processes throughout the book.

Now, over 10 years after the release of the first edition, the book is more relevant and topical than ever. The book has sold over 250,000 copies and is used in over 200 universities globally. It has become a go-to resource for investment banks, private equity, investment firms, and corporations undertaking M&A transactions, LBOs, IPOs, restructurings, and investment decisions. While the fundamentals haven't changed, the environment must adapt to changing market developments and conditions. As a result, Rosenbaum and Pearl have updated their widely-adopted book accordingly, turning the latest edition into a unique and comprehensive training package.

The Third Edition includes six downloadable valuation model templates: Comparable Companies Analysis, Precedent Transactions Analysis, Discounted Cash Flow Analysis, Leveraged Buyout Analysis, M&A Analysis, and IPO Valuation, available at

Table of contents

  1. Cover
  2. Additional Resources
  3. About the Authors
  4. About the Editors
  5. Foreword
  6. Acknowledgments
  7. Disclaimer
  8. Introduction
  9. Part One Valuation
    1. Chapter 1 Comparable Companies Analysis
      1. Summary of Comparable Companies Analysis Steps
      2. Step I. Select the Universe of Comparable Companies
      3. Step II. Locate the Necessary Financial Information
      4. Step III. Spread Key Statistics, Ratios, and Trading Multiples
      5. Step IV. Benchmark the Comparable Companies
      6. Step V. Determine Valuation
      7. Key Pros and Cons
      8. Illustrative Comparable Companies Analysis for ValueCo
      9. Notes
    2. Chapter 2 Precedent Transactions Analysis
      1. Summary of Precedent Transactions Analysis Steps
      2. Step I. Select the Universe of Comparable Acquisitions
      3. Step II. Locate the Necessary Deal-Related and Financial Information
      4. Step III. Spread Key Statistics, Ratios, and Transaction Multiples
      5. Step IV. Benchmark the Comparable Acquisitions
      6. Step V. Determine Valuation
      7. Key Pros and Cons
      8. Illustrative Precedent Transaction Analysis for ValueCo
      9. Notes
    3. Chapter 3 Discounted Cash Flow Analysis
      1. Summary of Discounted Cash Flow Analysis Steps
      2. Step I. Study the Target and Determine Key Performance Drivers
      3. Step II. Project Free Cash Flow
      4. Step III. Calculate Weighted Average Cost of Capital
      5. Step IV. Determine Terminal Value
      6. Step V. Calculate Present Value and Determine Valuation
      7. Key Pros and Cons
      8. Illustrative Discounted Cash Flow Analysis for ValueCo
      9. Notes
  10. Part Two Leveraged Buyouts
    1. Chapter 4 Leveraged Buyouts
      1. Key Participants
      2. Characteristics of a Strong LBO Candidate
      3. Economics of LBOs
      4. Primary Exit/Monetization Strategies
      5. LBO Financing: Structure
      6. LBO Financing: Primary Sources
      7. LBO Financing: Selected Key Terms
      8. LBO Financing: Determining Financing Structure
      9. Notes
    2. Chapter 5 LBO Analysis
      1. Financing Structure
      2. Valuation
      3. Step I. Locate and Analyze the Necessary Information
      4. Step II. Build the Pre-LBO Model
      5. Step III. Input Transaction Structure
      6. Step IV. Complete the Post-LBO Model
      7. Step V. Perform LBO Analysis
      8. Illustrative LBO Analysis for ValueCo
      9. Notes
  11. Part Three Mergers & Acquisitions
    1. Chapter 6 Sell-Side M&A
      1. Auctions
      2. Organization and Preparation
      3. First Round
      4. Second Round
      5. Negotiations
      6. Closing
      7. Negotiated Sale
      8. Notes
    2. Chapter 7 Buy-Side M&A
      1. Buyer Motivation
      2. Acquisition Strategies
      3. Form of Financing
      4. Deal Structure
      5. Buy-Side Valuation
      6. Merger Consequences Analysis
      7. Illustrative Merger Consequences Analysis for the BuyerCo / ValueCo Transaction
      8. Notes
  12. Part Four Initial Public Offerings
    1. Chapter 8 Initial Public Offerings
      1. Why Do Companies Go Public?
      2. Characteristics of a Strong IPO Candidate
      3. Key Participants
      4. Selected Key Terms
      5. Dual-Track Process
      6. Special Purpose Acquisition Companies (SPACs)
      7. Direct Listings
      8. Post-IPO Equity Offerings
      9. IPO Considerations
      10. Nasdaq Appendix
      11. Notes
    2. Chapter 9 The IPO Process
      1. Organization and Preparation
      2. Due Diligence, Drafting, and Filing
      3. Marketing and Roadshow
      4. Pricing and Allocation
      5. Notes
  13. Afterword
  14. Bibliography and Recommended Reading
  15. Index
  16. Advert
  18. EULA

Product information

  • Title: Investment Banking, 3rd Edition
  • Author(s): Joshua Rosenbaum, Joshua Pearl
  • Release date: February 2022
  • Publisher(s): Wiley
  • ISBN: 9781119867876