Corporate Mergers & Acquisitions
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Merging and acquiring is an essential part of your corporate armory. Corporate mergers and acquisitions play a significant role in many companies' value and growth strategies. If designed and executed successfully, these strategies will help your company gain and sustain a competitive advantage.
But not all M & As succeed. The reasons for failure in M&A are many, but can be synthesised into two key factors. Firstly, over-optimism in valuing the target company, in particular being overly optimistic about the synergies to be achieved post-acquisition. The second reason relates to the human element. We like to think we are rational beings but we all tend to behave irrationally at times. We believe we can accurately predict the future and repeat previous success ad infinitum. As a result, we seek evidence to confirm our beliefs and views instead of searching for evidence to contradict ourselves, and we don't pay sufficient attention to people issues arising from the deal.
This course is made up of two parts:
- Part A is a two day session that focuses on providing essential tools to avoid making mistakes in M & A. Numerous real-life examples of deals failing to create value and those that have, will also be discussed on the programme.
- Part B is an optional 1.5-day elective that will focus on financial modelling in Excel for most aspects of a typical M&A deal. This session is ideally attended by individuals with solid Excel modelling experience wishing to expand this into the M&A arena.
Key focus areas:
Key focus areas for the 2 day Corporate M & A course:
Empirical evidence of value creation for acquiring companies in M&A deals reveals that many acquisitions fail to deliver the expected benefits - research indicates that approximately only a third of deals create value.
In a global industry of deals valued between US$4 billion and US$5 billion per annum, the aforementioned statistics are unimpressive.
Case studies will be used to enhance learning and to provoke discussions in the classroom.
The programme will cover the following over a two-day period:
- Rationale for M&A;
- Link between overall strategy and M&A;
- Evaluating potential revenue and cost synergies;
- Typical steps in a deal;
- Valuing target companies;
- Regulatory issues and compliance;
- Taxation considerations in M&A deals;
- Structuring the deal (paying cash, using debt or issuing shares);
- Due diligence focus areas;
- Negotiating tips;
- Post merger integration; and
- Behavioural aspects of M&A.
Key focus areas for 1.5-day Financial Modelling elective:
Should you choose to attend the 1.5-day Financial Modelling elective, you will be able to:
- Build Excel models to enhance your knowledge and experience in analysing acquisitions;
- Value a target company including any synergies;
- Perform sensitivity and scenario analyses;
- Model the potential financial impact of the acquisition on the company or group;
- Prepare and compile financial information required by boards of directors and/ or shareholders in order to evaluate acquisitions;
- Develop techniques to identify and analyse potential value creation through mergers & acquisitions;
- Structure financial models to enable automatic updating of assumptions and enabling sensitivity and scenario analysis;
- Use key ratios to review the reasonability of financial forecasts;
- Recognise the importance of sensitivity analysis to identify key value drivers in business value;
- Value companies using FCF and earnings-based methods;
- Calculate accounting metrics to evaluate impact of acquisitions;
- Understand structuring implications of using debt versus equity to fund acquisitions;
- Analyse ‘earn out’ deal structures; and
- Calculate IRR’s and NPV’s on investment from differing perspectives.
Who should attend
This programme is designed for CEOs, functional directors, executives, members of audit committees, general managers, senior managers and heads of functional areas who want to gain insight into the mergers and acquisitions (M&A) process, with a view to increasing the chances of success of deals in which they are involved; and The 1.5 day elective is ideally attended by individuals with solid Excel modelling experience wishing to expand this into the M&A arena.