Mergers, Acquisitions, and Other Restructuring Activities, 10th Edition

Mergers, Acquisitions, and Other Restructuring Activities, 10th Edition

by Donald DePamphilis
Released September 2019
Publisher(s): Academic Press
ISBN: 9780128150764

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Book description

Mergers, Acquisitions, and Other Restructuring Activities: An Integrated Approach to Process, Tools, Cases, and Solutions, Tenth Edition, is the most comprehensive and cutting-edge text available on the subject. Supported by recent peer-reviewed academic research, this book provides many recent, notable deals, precedent-setting judicial decisions, government policies and regulations, and trends affecting M&As, as well as takeover strategies and tactics. Today's policies, politics and economics are reflected in the book's 40 case studies, 90% of which involve deals either announced or completed during the last several years. These cases represent friendly, hostile, highly leveraged, and cross-border transactions in ten different industries, involving public and private firms and those experiencing financial distress.

Sections discuss an overview of M&As, key regulations, common strategies and tactics, how managers may choose a business strategy from available options, valuation methods and basic financial modeling techniques, the negotiating process, how deal structuring and financing are inextricably linked, how consensus is reached during the bargaining process, the role of financial models in closing the deal and strategic growth options as alternatives to domestic M&As.

  • Provides a rigorous discussion of the strengths and limitations of financial modeling as applied to M&A and how these models can be applied in various areas
  • Includes new academic research and updated/revised case studies
  • Presents updated M&A tactics and strategies, along with court cases and new regulations governing business combinations, valuation methodologies and financing

Table of contents

  1. Cover image
  2. Title page
  3. Table of Contents
  4. Copyright
  5. Dedication
  6. About the Author
  7. Preface to the Tenth Edition
    1. To The Reader
    2. M&A Environment
    3. M&A Process
    4. M&A Valuation and Modeling
    5. Deal Structuring and Financing Strategies
    6. Alternative Business and Restructuring Strategies
    7. Updated Ancillary Materials
    8. To the Instructor
  8. Acknowledgments
  9. Part I: The Mergers and Acquisitions Environment
    1. Introduction
    2. Chapter 1: An Introduction to Mergers, Acquisitions, and Other Restructuring Activities
      1. Abstract
      2. Inside Mergers and Acquisitions: Centurylink Acquires Level 3 in a Search for Scale
      3. Chapter Overview
      4. Why Do M&As Happen?
      5. Merger and Acquisition Waves
      6. Understanding Corporate Restructuring Activities
      7. Alternative Takeover Strategies
      8. The Role of Holding Companies in Mergers and Acquisitions
      9. The Role of Employee Stock Ownership Plans (ESOPs) in M&As
      10. Business Alliances as Alternatives to M&As
      11. Participants in the Mergers and Acquisitions Process
      12. The Implications of M&As for Shareholders, Bondholders, and Society
      13. Some Things to Remember
      14. Chapter Discussion Questions
    3. Chapter 2: The Regulatory Environment
      1. Abstract
      2. Inside Mergers and Acquisitions: DowDuPont’s Regulatory Nightmare
      3. Chapter Overview
      4. Understanding Federal Securities Laws
      5. Understanding Antitrust Legislation
      6. M&A Implications of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Including 2018 Revisions)
      7. M&A Implications of Data Protection Regulations
      8. State Regulations Affecting Mergers and Acquisitions
      9. Restrictions on Direct Investment in the United States
      10. The US Foreign Corrupt Practices Act
      11. Specific Industry Regulation
      12. Environmental Laws
      13. Labor and Benefit Laws
      14. Cross-Border Transactions
      15. Some Things to Remember
      16. Chapter Discussion Questions
    4. Chapter 3: The Corporate Takeover Market: Common Takeover Tactics, Antitakeover Defenses, and Corporate Governance
      1. Abstract
      2. Inside Mergers and Acquisitions: Auction Euphoria Can Result in Buyer’s Remorse
      3. Chapter Overview
      4. Corporate Governance
      5. Understanding Alternative Takeover Tactics
      6. Other Tactical Considerations
      7. Developing a Bidding Strategy
      8. Activist Investors: Gaining Influence Without Control
      9. Understanding Alternative Takeover Defenses
      10. The Impact of Takeover Defenses on Shareholder Value
      11. Some Things to Remember
      12. Chapter Discussion Questions
  10. Part II: The Mergers and Acquisitions Process: Phases 1–10
    1. Introduction
    2. Chapter 4: Planning: Developing Business and Acquisition Plans—Phases 1 and 2 of the Acquisition Process
      1. Abstract
      2. Inside Mergers and Acquisitions: Home Shopping Feels the Heat From Amazon
      3. Chapter Overview
      4. The Role of Planning in Mergers and Acquisitions
      5. The Merger and Acquisition Process
      6. Phase 1: Building the Business Plan/Model
      7. The Business Plan as a Communication Document
      8. Phase 2: Building the Merger-Acquisition Implementation Plan
      9. Some Things to Remember
      10. Chapter Discussion Questions
    3. Chapter 5: Implementation: Search Through Closing—Phases 3–10 of the Acquisition Process
      1. Abstract
      2. Inside M&A: In the Wake of Industry Consolidation Discovery Communications Buys Scripps Networks
      3. Chapter Overview
      4. Characteristics of High Performing Acquirers
      5. Phase 3: The Search Process
      6. Phase 4: The Screening Process
      7. Phase 5: First Contact
      8. Phase 6: Negotiation
      9. Phase 7: Developing the Integration Plan
      10. Phase 8: Closing
      11. Phase 9: Implementing Postclosing Integration
      12. Phase 10: Conducting a Postclosing Evaluation
      13. The Increasing Application of Data Analytics in M&As
      14. Some Things to Remember
      15. Chapter Discussion Questions
    4. Chapter 6: Postclosing Integration: Mergers, Acquisitions, and Business Alliances
      1. Abstract
      2. Inside Mergers and Acquisitions: Postmerger Integration Challenges
      3. Chapter Overview
      4. The Degree of Integration Varies by Type of Acquirer and Deal
      5. The Role of Integration in Successful Acquisitions
      6. Integration Is a Process, Not an Event
      7. Integrating Business Alliances
      8. Integrating Family Owned Firms
      9. Some Things to Remember
      10. Chapter Discussion Questions
  11. Part III: Mergers and Acquisitions Valuation and Modeling
    1. Introduction
    2. Chapter 7: Mergers and Acquisitions Cash Flow Valuation Basics
      1. Abstract
      2. Inside M&A: Delaware Supreme Court Rules on the Role of Valuation Methods in Appraisal Rights
      3. Chapter Overview
      4. Estimating Required Financial Returns
      5. Risk Assessment
      6. Calculating Free Cash Flows
      7. Applying Discounted Cash Flow Methods
      8. Using the Enterprise Method to Estimate Equity Value
      9. Valuing Nonoperating Assets
      10. Some Things to Remember
      11. Chapter Discussion Questions
      12. Practice Problems and Answers
    3. Chapter 8: Relative, Asset-Oriented, and Real Option Valuation Basics
      1. Abstract
      2. Inside Mergers & Acquisitions: Thyssenkrupp and Tata Steel Combine European Steel Operations
      3. Chapter Overview
      4. Relative-Valuation Methods
      5. Asset-Oriented Methods
      6. The Weighted-Average Valuation Method
      7. Real-Options Analysis
      8. Determining When to Use the Different Approaches to Valuation
      9. Valuing Initial Public Offerings
      10. What Do Valuation Professionals Do in Practice?
      11. Some Things to Remember
      12. Chapter Discussion Questions
      13. Practice Problems and Answers
    4. Chapter 9: Financial Modeling Basics
      1. Abstract
      2. Inside M&A: Verizon Discounts the Yahoo Purchase Price
      3. Chapter Overview
      4. What Is Financial Modeling?
      5. Financial Modeling Data Requirements
      6. Common Financial Model Linkages
      7. Modelling Changes in US Corporate Tax Laws
      8. Key Steps in the Valuation Process
      9. Model Balancing Mechanism
      10. Data Sources
      11. Managing the Model
      12. Addressing Valuation Issues in a Near Zero Interest Rate Environment
      13. Some Things to Remember
      14. Chapter Discussion Questions
      15. Practice Problems and Answers
    5. Chapter 10: Analysis and Valuation of Privately Held Firms
      1. Abstract
      2. Inside M&A: The Need for Capital Forces Sale of Demand Energy
      3. Chapter Overview
      4. How Family Control Affects M&A Activity
      5. Private Versus Public Company Governance
      6. Challenges of Valuing Privately Held Companies
      7. Process for Valuing Privately Held Businesses
      8. Step 1: Adjusting Financial Statements
      9. Step 2: Applying Valuation Methodologies to Privately Held Companies
      10. Step 3: Developing Discount Rates
      11. Step 4: Applying Control Premiums, Liquidity, and Minority Discounts
      12. Early Stage Investment
      13. Taking Private Companies Public
      14. Using Leveraged Employee Stock Ownership Plans to Buy Private Companies
      15. Empirical Studies of Shareholder Returns
      16. Some Things to Remember
      17. Chapter Discussion Questions
      18. Practice Problems and Answers
  12. Part IV: Deal Structuring and Financing Strategies
    1. Introduction
    2. Chapter 11: Structuring the Deal: Payment and Legal Considerations
      1. Abstract
      2. Inside M&A: Getting to Yes on Price
      3. Chapter Overview
      4. The Deal-Structuring Process
      5. Form of Acquisition Vehicle and Postclosing Organization
      6. Legal Form of the Selling Entity
      7. Form of Payment
      8. Managing Risk and Reaching Consensus on Purchase Price
      9. Constructing Collar Arrangements
      10. M&A Options and Warrants Takeover Strategies
      11. Form of Acquisition
      12. Some Things to Remember
      13. Chapter Discussion Questions
    3. Chapter 12: Structuring the Deal: Tax and Accounting Considerations
      1. Abstract
      2. Inside M&A: CVS’s Takeover of Aetna Blurs Traditional Roles in the US Healthcare Industry
      3. Chapter Overview
      4. Understanding Tax Authority Communications
      5. Alternative Tax Structures
      6. Taxable Transactions
      7. Tax-Free Transactions
      8. Tax Cuts and Jobs Act of 2017
      9. State and Local Tax Issues
      10. International Taxes
      11. Tax Inversions
      12. Master Limited Partnerships (MLPs), Real Estate Investment Trusts (REITs), and Yield Cos
      13. Financial Reporting of Business Combinations
      14. Impact of Acquisition Accounting on Business Combinations
      15. Recapitalization (“RECAP”) Accounting
      16. Putting It All Together: Takeover and Deal Structure Strategies
      17. Some Things to Remember
      18. Chapter Discussion Questions
      19. Practice Problems and Answers
    4. Chapter 13: Financing the Deal: Private Equity, Hedge Funds, and Other Sources of Financing
      1. Abstract
      2. Inside M&A: Staples Goes Private in Response to the Shift to Online Retailing
      3. Chapter Overview
      4. The Role of Public and Private Financial Markets
      5. How Are M&A Transactions Commonly Financed?
      6. What Is the Role of Private Equity, Hedge, and Venture Capital Funds in Deal Financing?
      7. Impact of Tax Reform on M&A Financing
      8. Leveraged Buyouts as Financing Strategies
      9. What Factors Are Critical to Successful LBO’s?
      10. How Do LBO’s Create Value?
      11. The Impact on Financial Returns of Alternative Transaction Strategies
      12. Common LBO Deal and Capital Structures
      13. Some Things to Remember
      14. Chapter Discussion Questions
    5. Chapter 14: Applying Financial Models: To Value, Structure, and Negotiate Stock and Asset Purchases
      1. Abstract
      2. Inside M&A: The Anatomy of a M&A Negotiation
      3. Chapter Overview
      4. Understanding and Applying M&A Financial Models
      5. M&A Models: Stock Purchases
      6. M&A Models: Asset Purchases
      7. Quantifying Synergy
      8. Things to Remember
      9. Chapter Discussion Questions
      10. Practice Problems and Answers
      11. Appendix A: Debt Repayment Schedule, Convertible Securities, Interest Rates, and Betas
  13. Part V: Alternative Business and Restructuring Strategies
    1. Introduction
    2. Chapter 15: Domestic and Cross-Border Business Alliances: Joint Ventures, Partnerships, Strategic Alliances, and Licensing
      1. Abstract
      2. Inside M&A: Comcast and Charter Forge Wireless Alliance
      3. Chapter Overview
      4. Motivations for Business Alliances
      5. What Makes Business Alliances Successful?
      6. Alternative Legal Forms of Business Alliances
      7. Bilateral Versus Multilateral Alliances
      8. Strategic and Operational Plans
      9. Resolving Business Alliance Deal-Structuring Issues
      10. Challenges of Cross-Border Joint Ventures
      11. Potential Impediments to Cross-Border Alliances and Minority Investments
      12. Empirical Findings
      13. Some Things to Remember
      14. Chapter Discussion Questions
    3. Chapter 16: Alternative Exit and Restructuring Strategies: Divestitures, Spin-Offs, Carve-Outs, Split-Offs, and Tracking Stocks
      1. Abstract
      2. Inside M&A: Managing Risk Through Restructuring
      3. Chapter Overview
      4. Why Do Firms Exit Businesses?
      5. Divestitures
      6. Spin-Offs
      7. Equity Carve-Outs
      8. Split-Offs and Split-Ups
      9. Tracking, Targeted, and Letter Stocks
      10. Restructuring Implementation Issues
      11. Key Restructure Legal Documents
      12. Comparing Alternative Exit and Restructuring Strategies
      13. Choosing Among Divestiture, Carve-Out, and Spin-Off Restructuring Strategies
      14. Determinants of Returns to Shareholders Resulting From Restructuring Strategies
      15. Some Things to Remember
      16. Chapter Discussion Questions
    4. Chapter 17: Alternative Exit and Restructuring Strategies: Bankruptcy, Reorganization, and Liquidation
      1. Abstract
      2. Inside M&A: SunEdison Exits Bankruptcy Amid Echoes of Enron
      3. Chapter Overview
      4. Business Failure
      5. Voluntary Settlement Outside of Bankruptcy Court
      6. Reorganization and Liquidation in Bankruptcy
      7. Alternative Options for Failing Firms
      8. The Increasing Role of Hedge Funds in the Bankruptcy Process
      9. Failing Firms and Systemic Risk
      10. Predicting Corporate Default and Bankruptcy
      11. Empirical Studies of Financial Distress
      12. Some Things to Remember
      13. Chapter Discussion Questions
    5. Chapter 18: Cross-Border Mergers and Acquisitions: Analysis and Valuation
      1. Abstract
      2. Inside M&A: Shareholder Angst Causes Breakup of Merger and Longstanding Joint Venture
      3. Chapter Overview
      4. Globally Integrated Versus Segmented Capital Markets
      5. Motives for International Expansion
      6. Common International Market Entry Strategies
      7. Structuring Cross-Border Deals
      8. Financing Cross-Border Deals
      9. Planning and Implementing Cross-Border Transactions in Emerging Countries
      10. How Are Cross-Border Transactions Valued?
      11. Empirical Studies of Financial Returns on Cross-Border Transactions
      12. Some Things to Remember
      13. Chapter Discussion Questions
  14. References
  15. Glossary
  16. Index

Product information

  • Title: Mergers, Acquisitions, and Other Restructuring Activities, 10th Edition
  • Author(s): Donald DePamphilis
  • Release date: September 2019
  • Publisher(s): Academic Press
  • ISBN: 9780128150764