Mergers & Acquisitions For Dummies, 2nd Edition

Mergers & Acquisitions For Dummies, 2nd Edition

by Bill Snow
Released May 2023
Publisher(s): For Dummies
ISBN: 9781394169504

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Book description

Explore M&A, in simple terms

Mergers & Acquisitions For Dummies provides useful techniques and real-world advice for anyone involved with – or thinking of becoming involved with – transactional work. Whether you are a transactions pro, a service provider tangentially involved in transactions, or a student thinking of becoming an investment banker, this book will provide the insights and knowledge that will help you become successful. Business owners and executives will also find this book helpful, not only when they want to buy or sell a company, but if they want to learn more about what improves a company’s value. The evaluation process used by M&A professionals to transact a business sale is often quite different from the processes used by owners and executives to manage those businesses.

In plain English terms that anyone can understand, this book details the step-by-step M&A process, describes different types of transactions, demonstrates various ways to structure a deal, defines methods to identify and contact targets, provides insights on how to finance transactions, reveals what helps and hurts a company’s valuation, offers negotiating tips, explains how to perform due diligence, analyzes the purchase agreement, and discloses methods to help ensure the combined companies are successfully integrated. If you’re getting involved with a merger or an acquisition, this book will help you gain a thorough understanding of what the heck is going on. Updates to this second edition include quality of earnings reports, representation and warranty insurance, how to hire investment bankers, changes to the offering documents, the rise of family offices, and the ubiquity of adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) as a basis for valuation.

  • Understand the merger and acquisition process in a simple, easy-to-understand manner
  • Learn the nomenclature and terminology needed to talk and act like a player
  • Determine how to hire the people who will help you conduct M&A deals
  • Discover tips on how to successfully negotiate transactions

Mergers & Acquisitions For Dummies is a great choice for business owners and executives, students, service providers, and anyone interested in M&A transactions.

Table of contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Introduction
    1. About This Book
    2. Conventions Used in This Book
    3. What You’re Not to Read
    4. Foolish Assumptions
    5. How This Book Is Organized
    6. Icons Used in This Book
    7. Beyond the Book
    8. Where to Go from Here
  5. Part 1: Planning to Do a Transaction
    1. Chapter 1: Explaining Mergers and Acquisitions
      1. Defining the Term
      2. Seeing How M&A Occurs
      3. Introducing Important Terms and Phrases
      4. Considering the Costs Associated with M&A
      5. Defining Types of Companies
    2. Chapter 2: Learning M&A Rules and Decorum
      1. Knowing How the Game Is Played
      2. Providing Updates to Employees
      3. Discerning Two Types of M&A Processes
      4. Making a Market in M&A
      5. Entering the M&A Zone
    3. Chapter 3: Utilizing the M&A Process
      1. Trusting The Process
      2. Reviewing the M&A Process
    4. Chapter 4: Making Sense of the Economics of M&A
      1. Timing the Market
      2. Weighing Microeconomic Factors
      3. Inflating Valuations
      4. Observing Systemic Issues
      5. Detecting Tailwinds and Headwinds in M&A
      6. Putting Together Your M&A Plan
    5. Chapter 5: Finding Buyers and Sellers
      1. Collaborating to Build a List
      2. Putting Together the Tools
      3. Executing a Confidentiality Agreement (CA)
      4. Handling a Breach of Confidentiality
      5. Keeping the Cat in the Bag: Advice for Buyers
      6. Contacting Buyers
      7. Contacting Sellers
      8. Getting Past Screeners
      9. Tracking Your Calls
  6. Part 2: Marketing the Transaction
    1. Chapter 6: Explaining and Influencing Valuation
      1. Pondering the Meaning of Valuation
      2. Comparing Different Points of View
      3. Prioritizing Net-versus-Gross Proceeds
      4. Analyzing a Valuation Report
      5. Measuring Returns for the Buyer
      6. Cutting to the Chase: Give Us the Numbers!
      7. Influencing Valuation
    2. Chapter 7: Creating and Reviewing an Offering Document
      1. Naming the Document
      2. Revealing the Offering Document's New Look
      3. Sharing the Go-to-Market Strategy
      4. Doing the Numbers
      5. Planning for a Smooth Transaction
      6. Digesting a Company’s Financials
    3. Chapter 8: Reading and Writing the Offers
      1. Examining the Indication of Interest (IOI)
      2. Signaling Sincerity with a Letter of Intent (LOI)
      3. Recognizing the Salient Issues in the LOI
      4. Agreeing to and Extending Exclusivity
  7. Part 3: Selling the Transaction
    1. Chapter 9: Selecting Advisors
      1. Choosing Wisely: Identifying Ideal Advisors
      2. Choosing Inside Advisors
      3. Hiring Outside Advisors
      4. Avoiding Communication Breakdowns
      5. Getting Your Banker Involved
    2. Chapter 10: Hiring an Investment Banker
      1. Examining the Role of Investment Bankers
      2. Working with an Investment Banker
      3. Timing the Deal: How Long Should a Process Take?
      4. Asking Interview Questions
      5. Asking the Ask Price Question
      6. Checking an Investment Banker’s References
    3. Chapter 11: Arranging Meetings Between Buyer and Seller
      1. Recognizing the Importance of Meeting in Person
      2. Arranging Management Meetings
      3. Perfecting the Seller’s Presentation
      4. Preparing Buyers for Management Meetings
      5. Determining Whether the Meeting Went Well
    4. Chapter 12: Financing the Transaction
      1. Exploring Financing Options
      2. Structuring M&A Deals
      3. Taking a Closer Look at Investors
      4. Striking the Right Type of Deal
      5. Financing a Problem Child
    5. Chapter 13: Learning How to Negotiate Successfully
      1. Knowing Your Position
      2. Using Successful Negotiating Tactics
      3. Settling Common Transaction Issues
      4. Bridging a Valuation Gap
      5. Avoiding Common M&A Negotiating Mistakes
      6. Surviving Unforeseen Twists and Turns
      7. Dealing with Renegotiation
      8. Comprehending Why Transactions Fail
  8. Part 4: Concluding and Combining
    1. Chapter 14: Confirming Due Diligence
      1. Digging Into the Due Diligence Process
      2. Looking More Closely at the Details of Due Diligence
      3. Requesting Additional Information
    2. Chapter 15: Documenting the Transaction
      1. Drafting the Deal
      2. Navigating the Final Purchase Agreement
      3. The Rise of Reps & Warranties (R&W) Insurance
    3. Chapter 16: Closing and Integrating the Acquisition
      1. Gathering the Necessary Parties
      2. Walking Through the Closing Process
      3. Tying Up Loose Ends Shortly after Closing
      4. Shifting from Entrepreneurial to Professional
      5. Following Through: The Deal After the Deal
      6. Dealing with Disputes
    4. Chapter 17: Ensuring a Successful Acquisition
      1. Planning the Integration
      2. Culling Products and Services
      3. Combining Operations, Administration, and Finance
      4. Handling Personnel: Successful First Steps for New Owners
  9. Part 5: The Part of Tens
    1. Chapter 18: Ten Transaction Pitfalls
      1. Is the Deal Too Good to Be True?
      2. How Is the Buyer Financing the Deal?
      3. How Much Cash Is in the Offer?
      4. What Are the Conditions of Escrow?
      5. Is It a Stock Deal or an Asset Deal?
      6. How Is Working Capital Settled Post-Closing?
      7. Is the Inventory 100 Percent Salable?
      8. Who Pays Off Long-Term Debt, and What Happens to the Line of Credit?
      9. What Are the Tax Implications of the Seller’s Accounts Receivable?
      10. Is the Seller Signing a Noncompete Agreement with the Buyer?
    2. Chapter 19: Ten Reasons Acquisitions Fail
      1. Overleveraged
      2. Poor Execution
      3. Culture Clash
      4. Fired by Customers
      5. Lack of Synergies
      6. Shoddy Systems
      7. Reporting and Bureaucracy
      8. The Zombie
      9. Responsibility with No Authority
      10. Wrong Management
    3. Chapter 20: Ten Lurking Problems for Sellers
      1. Quality of Earnings and Inventory
      2. The Ask-Price Question
      3. Owner Succession
      4. Rent
      5. Re-Trade
      6. Working Capital Target
      7. Accruals
      8. Parallel Activities
      9. The End-Run Approach
      10. Taxes
  10. Index
  11. About the Author
  12. Connect with Dummies
  13. End User License Agreement

Product information

  • Title: Mergers & Acquisitions For Dummies, 2nd Edition
  • Author(s): Bill Snow
  • Release date: May 2023
  • Publisher(s): For Dummies
  • ISBN: 9781394169504