• Acquisitions with shares | Stocks and bonds | Finance & Capital Markets | Khan Academy

    Mechanics of a share-based acquisition. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks through the mechanics of how this happens and details what is likely to happen in ...

    published: 12 May 2011
  • Accretion Dilution - Rules of Thumb for Merger Models

    Learn about rules of thumb you can use to determine whether an acquisition will be accretive or dilutive in advance, based on the P/E multiples of the buyer and seller, the % cash, stock, and debt used, and the prevailing interest rates on cash and debt. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Here's an outline of what we cover in the lesson, and the step-by-step process you can follow to figure this out for yourself: Why Do We Care About Rules of Thumb for M&A Deals / Merger Models? It's a VERY common interview question - "How can you tell whether an M&A deal is accretive or dilutive?" People often believe, incorrectly, that there's no way to tell without building the entire model. But shortcuts always e...

    published: 17 Nov 2013
  • IRR vs. Cash on Cash Multiples in Leveraged Buyouts and Investments

    In this IRR vs Cash tutorial, you’ll learn the key distinctions between the internal rate of return (IRR). By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You will also learn further distinctions on the cash-on-cash multiple or money-on multiple when evaluating deals and investments – and you’ll understand why venture capital (VC) firms target one set of numbers, whereas private equity (PE) firms target a different set of numbers. http://youtube-breakingintowallstreet-com.s3.amazonaws.com/109-05-IRR-vs-Cash-on-Cash-Multiples.xlsx Table of Contents: 1:35 Why Do IRR and Cash-on-Cash Multiples Both Matter? 3:05 What Do Private Equity vs. Venture Capital vs. Other Firms Care About? 8:30 How to Use These Metrics in R...

    published: 05 Aug 2014
  • What Is A Cash Merger?

    Definition of cash merger where an acquiring firm buys the target firm's stock with cash, instead more common practice exchanging it own definition out buying its a happens when company's. The acquirer can pay cash outright for all the equity shares of target company, paying what is an 'all deal'all mergers and acquisitions occur with no exchange stock; parent company purchases a majority common 7 aug 2017 merger mode payment business acquisition in which used to buy stock acquired firm instead striking about 1990s, however, way they're being deal, roles two parties are clear cut, but deals also be funded combination. In the event of a cash only merger transaction, exchange ratio is not excluding any effects, what actual based on stock mergers and acquisitions (m&a) are complex, involving ...

    published: 10 Oct 2017
  • Merger Model Interview Questions: What to Expect

    You’ll learn about the most common merger model questions in this tutorial, as well as what type of “progression” to expect and the key principles you must understand in order to answer ANY math questions on this topic. Table of Contents: 3:26 Question #1: The Basic Rules 5:23 Question #2: With Real Numbers 8:21 Question #3: Equity Value, Enterprise Value, and Valuation Multiples 12:17 Question #4: Ranges for the Multiples 14:26 Question #5: What if the Buyer is Twice as Big? 16:26 Recap, Summary, and Key Principles Question #1: The Basic Rules "A company with a P / E multiple of 25x acquires another company for a purchase P / E multiple of 15x. Will the deal be accretive or dilutive?" ANSWER: You can’t tell unless it’s a 100% Stock deal. If it is, it will be accretive because th...

    published: 11 Oct 2016
  • Example of merger - Q1 to Q7 (Covered -practice manual)

    Points covered in this video - 1. How to calculate exchange ratio 2. PRE (before) and post (after) merger Earnings Per Share calculation. 3. What it means - shareholders of company (acquired) are not at loss. 4. Market price post merger. 5. Value of Company after merger 6. Whether shareholders of both the Companies are better off? 7. Equivalent Earnings of Shares of B Ltd.

    published: 09 Apr 2015
  • That Mitchell And Webb Look - The Drunk Office

    Please Thumbs Up!

    published: 24 Dec 2012
  • Why Do Stock Prices Often Drop After Mergers and Acquisition

    Professor Antonio Bernardo and student Feifei Li say acquiring firms are often overvalued. Visit UCLA Anderson School of Management http://www.anderson.ucla.edu/ Click here for more faculty videos from UCLA Anderson School of Management http://www.anderson.ucla.edu/x17273.xml

    published: 11 Sep 2008
  • Purchase Price in M&A Deals: Equity Value or Enterprise Value?

    In this tutorial, you’ll learn why the real price paid by a buyer to acquire a seller in an M&A deal is neither the Purchase Equity Value nor the Purchase Enterprise Value… exactly. http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 4:29: Problem #1: The Treatment of Debt 8:03: Problem #2: The Treatment of Cash 11:45: Recap and Summary Common questions: “In an M&A deal, does the buyer pay the Equity Value or the Enterprise Value to acquire the seller?” “What does it mean in press releases when they say the purchase consideration ‘includes the assumption of debt’? Does that mean the price is the Enterprise Value?” The Basic Definitions Equity Value: Value of ALL the company’s assets, but only to...

    published: 10 Mar 2016
  • Bill Gross on Market Outlook, Henderson Merger

    Jun.07 -- Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund, talks about his current market view as he expects lower returns and holds a large cash position. He speaks with Bloomberg's Erik Schatzker on "Bloomberg Markets."

    published: 07 Jun 2017
  • Mergers and Acquisitions

    Describes the different types of corporate takeovers and the sources of gains (if any) from these takeovers. Explains the differences between stock and cash transactions.

    published: 06 Jul 2015
  • TATA-Bharti Airtel Merger is Now Going to be a Reality | CNBC TV18

    TTSL, TTML To merget their consumer mobile businesses with Bharti Airtel Merger on a Debt-free cash-free basis TATA CMB-AIRTEL CNBC-TV18 is India's No.1 Business medium and the undisputed leader in business news. The channel's benchmark coverage extends from corporate news, financial markets coverage, expert perspective on investing and management to industry verticals and beyond. CNBC-TV18 has been constantly innovating with new genres of programming that helps make business more relevant to different constituencies across India. India's most able business audience consumes CNBC-TV18 for their information & investing needs. This audience is highly diversified at one level comprising of key groups such as business leaders, professionals, retail investors, brokers and traders, intermedia...

    published: 12 Oct 2017
  • Majority of Sprint shares vote to receive cash in merger

    Majority of Sprint shares vote to receive cash in merger The majority of Sprint Nextel Corp shares elected to receive cash when Japan's SoftBank Corp's takes control of the company. About 53 percent of Sprint's outstanding shares voted to take money in preliminary election over the merger. http://news.yahoo.com/majority-sprint-shares-vote-receive-cash-merger-120455634.html http://www.wochit.com

    published: 08 Jul 2013
  • APG Cash Drawer and Cash Bases' customers profit from merger

    Two companies are now one: The integration of APG Cash Drawer and Cash Bases has been taking place over the last six months. Stephen Bergeron, VP Global Marketing at APG/Cash Bases explains how both companies and their consumers profit from the merger.

    published: 24 Feb 2016
  • Merger Model: Assessment Centre Case Study

    In this Merger Model tutorial, you'll learn how to complete a merger model case study exercise given at an assessment center. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You will also learn how to set up a simplified model, how to calculate accretion / (dilution) under different scenarios, and how to calculate the pro-forma credit stats and ratios for the combined company. http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-04-Merger-Model-Assessment-Center-Case-Study.pdf "Before" Excel File: http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-04-Merger-Model-AC-Case-Study-Before.xlsx "After" Excel File: http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-04-Merger-Model-AC-Case...

    published: 01 Jul 2014
  • Expense Synergies in Merger Models

    In this expense synergies lesson, you'll learn why expense synergies matter, what they consist of, how they impact M&A deals. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You'll also learn and accretion / dilution, and 3 common mistakes that people make when incorporating synergies into models. Table of Contents: 3:45 Example of Expense Synergies (Office Consolidation) 7:57 Oversight #1: More Granular Estimates / Checks 11:37 Oversight #2: It Takes Time to Realize Synergies 14:39 Oversight #3: It Takes Money to Realize Synergies 17:39 How Does All of This Impact the Deal, Accretion / (Dilution), and So On? 18:34 Recap and Summary Why do Synergies matter? And what are they exactly? Put simply, they're cases...

    published: 07 Oct 2014
  • National Finance offers 'cash buyout' to Oman Orix shareholders for merger

    Merger Offer National Finance Company has decided to offer cash buyout to the shareholders of Oman Orix Leasing Company as part of the merger deal between the two leading leasing firms. Solar EOR Project The world’s largest solar-based enhanced oil recovery (EOR) project, Miraah, is expected to begin delivering steam by August this year. Sohar Port Hutchison, which is the container terminal operator at Sohar Port, has launched a new auto gate system at its terminal. Meetaq Islamic Finance Bank Muscat’s Meethaq Islamic financing receivables rose to OMR902 million as of March 31, 2017 compared to OMR665 million for the same period of 2016. Stock Market Share prices on the Muscat Securities Market edged down on selling pressure Website: http://timesofoman.com Facebook: http://face...

    published: 15 May 2017
  • Simple merger arbitrage with share acquisition | Finance & Capital Markets | Khan Academy

    Showing how a merger arbitrage player might act if they were sure that a transaction would go through. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/leveraged-buy-outs/v/basic-leveraged-buyout-lbo?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks ...

    published: 12 May 2011
  • Cost of merger

    Did you liked this video lecture? Then please check out the complete course related to this lecture, Advanced Financial Management - Mergers and Acquisitions with 20+ Lectures, 2+ hours content available at discounted price(only Rs.640) with life time validity and certificate of completion. https://www.udemy.com/draft/373106/?couponCode=YTB10A This course is about Advanced Financial Management - Mergers and Acquisitions. Often we come across, many big companies announcing Mergers and Acquisitions. We also see many times two or more companies in same line of activity getting merged, as well as companies in different line of activities. But why do they Merge? What is the benefit of merging the entities? How the companies are valued for the purpose of merger? How the purchase value is de...

    published: 14 Nov 2015
  • WACC, Cost of Equity, and Cost of Debt in a DCF

    In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF impact variables like the Cost of Equity, Cost of Debt. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You'll also learn about WACC (Weighted Average Cost of Capital) - and why it is not always so straightforward to answer these questions in interviews. Table of Contents: 2:22 Why Everything is Interrelated 4:22 Summary of Factors That Impact a DCF 6:37 Changes to Debt Percentages in the Capital Structure 11:38 The Risk-Free Rate, Equity Risk Premium, and Beta 12:49 The Tax Rate 14:55 Recap and Summary Why Do WACC, the Cost of Equity, and the Cost of Debt Matter? This is a VERY common interview question: "If a compan...

    published: 23 Sep 2014
  • Earnout Modeling in M&A Deals and Merger Models

    In this tutorial, you’ll learn how and why earn-outs are used in M&A deals, how they appear on the 3 financial statements, and how they impact the transaction assumptions and combined financial statements in a merger model. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 1:28 What Earn-Outs Are and Why You Use Them 7:46 How Earn-Outs Show Up on the 3 Statements 12:21 How Earn-Outs Impact Purchase Price Allocation and Sources & Uses 16:02 How Earn-Outs Affect the IS, BS, and CFS in a Merger Model 19:12 Recap and Summary What Earn-Outs Are and Why You Use Them Instead of paying for a company 100% upfront, the buyer offers to pay some portion of the price later on – *if certain conditions are ...

    published: 12 May 2015
  • Free Cash Flow: How to Interpret It and Use It In a Valuation

    You'll learn what "Free Cash Flow" (FCF) means, why it's such an important metric when analyzing and valuing companies. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You'll also learn how to interpret positive vs. negative FCF, and what different numbers over time mean -- using a comparison between Wal-Mart, Amazon, and Salesforce as our example. Table of Contents: 0:54 What Free Cash Flow (FCF) is and Why It's Important 2:26 What Positive FCF Tells You, and What to Do With It 3:56 What Negative FCF Tells You, and What to Do With It 4:38 Why You Exclude Most Investing and Financing Activities in the FCF Calculation 7:55 How to Use and Interpret FCF When Analyzing Companies 11:58 Wal-Mart vs. Amazon vs. Salesf...

    published: 20 May 2014
  • VW/Porsche Merger, Cash for Clunkers - Autoline Daily 207

    The U.S. Department of Transportation expanded the cash-for-clunkers program yesterday. General Motors may sell the Chevy Volts lithium-ion battery pack to rival automakers. A new Top Gear controversy involving the Porsche Shooting Brake. All that and more, plus Jim Hall predicts what cars from today will be considered classics in the future.

    published: 14 Aug 2009
  • Enterprise Value: Why You Add and Subtract Items

    In this Enterprise Value lesson we take a look at the rules of thumb to figure out what should be added or subtracted when you calculate it. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" This also covers a short case study based on Vivendi (a leading media/telecom conglomerate based in France), Everyone knows the definition of Enterprise Value: Take Equity Value, add Debt and Preferred Stock (and others), and subtract Cash... But WHY do you do any of that? Enterprise Value represents the value of the company's CORE BUSINESS OPERATIONS to ALL THE INVESTORS in the company - equity, debt, preferred stock, etc. So focus on OPERATIONAL ITEMS and ALL INVESTORS when thinking about what to include... and what to exclu...

    published: 03 Jun 2014
  • Shannon and the Merger - Folsom Prison Blues (Johnny Cash cover)

    Shannon and the Merger - Jergel's Rhythm Grille - Folsom Prison Blues (4/23/17)

    published: 11 May 2017
  • BEER CULTURE IS F*CKED?!

    With the recent sale merger of SABMiller and InBev, it's looking like your hard earned cash is going to one giant company no matter which beer you decide to drink. -- LINKS: http://www.nytimes.com/2016/06/02/opinion/a-big-merger-may-flatten-americas-beer-market.html http://www.chicagotribune.com/business/ct-megabrew-ab-inbev-sabmiller-merger-20161010-story.html http://www.wsj.com/articles/craft-brewers-take-issue-with-ab-inbev-distribution-plan-1449227668 -- Follow us: http://twitter.com/ETCShow http://twitter.com/EliotETC http://twitter.com/RickyFTW

    published: 12 Oct 2016
  • Bayer's $66B deal for Monsanto is biggest takeover of 2016

    How will Bayer and Monsanto's all-cash $66 billion merger agreement impact shares? Varney & Co. with more.

    published: 14 Sep 2016
  • Majority of Sprint shares vote to receive cash in merger

    Majority of Sprint shares vote to receive cash in merger The majority of Sprint Nextel Corp shares elected to receive cash when Japan's SoftBank Corp's takes control of the company. About 53 percent of Sprint's outstanding shares voted to take money in preliminary election over the merger. http://news.yahoo.com/majority-sprint-shares-vote-receive-cash-merger-120455634.html http://www.wochit.com

    published: 08 Jul 2013
  • The Inner Circle - Hard Knock Gamers Merger! Cash Prize Gaming Tournament!

    TicGn.com -~-~~-~~~-~~-~- Please watch: "Nintendo Switch Giveaway | Nintendo Switch Impressions" https://www.youtube.com/watch?v=GYIQhYRKldM -~-~~-~~~-~~-~-

    published: 19 Apr 2016
developed with YouTube
Acquisitions with shares | Stocks and bonds | Finance & Capital Markets | Khan Academy

Acquisitions with shares | Stocks and bonds | Finance & Capital Markets | Khan Academy

  • Order:
  • Duration: 3:47
  • Updated: 12 May 2011
  • views: 56455
videos
Mechanics of a share-based acquisition. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/dilution-tutorial/v/stock-dilution?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks through the mechanics of how this happens and details what is likely to happen in the public markets because of the transaction (including opportunities for arbitrage). About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
https://wn.com/Acquisitions_With_Shares_|_Stocks_And_Bonds_|_Finance_Capital_Markets_|_Khan_Academy
Accretion Dilution - Rules of Thumb for Merger Models

Accretion Dilution - Rules of Thumb for Merger Models

  • Order:
  • Duration: 13:25
  • Updated: 17 Nov 2013
  • views: 44279
videos
Learn about rules of thumb you can use to determine whether an acquisition will be accretive or dilutive in advance, based on the P/E multiples of the buyer and seller, the % cash, stock, and debt used, and the prevailing interest rates on cash and debt. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Here's an outline of what we cover in the lesson, and the step-by-step process you can follow to figure this out for yourself: Why Do We Care About Rules of Thumb for M&A Deals / Merger Models? It's a VERY common interview question - "How can you tell whether an M&A deal is accretive or dilutive?" People often believe, incorrectly, that there's no way to tell without building the entire model. But shortcuts always exist! Plus, this shortcut is very useful in real life. You can use it to "sanity check" your model, approximate the impact of a deal in advance, and so on. So it's a time-saver *and* a good way to check your work. Rules of Thumb for Merger Models AKA Accretion / Dilution Models: CONCEPT: An M&A deal is accretive if the combined company's EPS (Earnings Per Share) is higher than the buyer's standalone EPS prior to the transaction. It's dilutive if the combined EPS is lower, and it's neutral if the EPS is the same afterward. The outcome depends on price paid for the seller, the method of payment (cash, stock, or debt), the interest rate on debt and cash, and the buyer's P/E multiple, among other factors. In real life, it's very difficult to tell with high precision whether the deal will be accretive or dilutive without running the whole model - due to added costs, synergies, write-ups, timing differences, the cumulative impact of additional interest on debt and foregone interest on cash, etc... BUT you can approximate the impact with a simple rule of thumb: 1. Calculate the Weighted "Cost" of Acquisition for the Buyer... 2. And compare it to the Seller's "Yield" AT its purchase price. (i.e. Seller's Net Income / Equity Purchase Price) This step is essential - if the seller is currently valued at $900 million and the buyer pays $1 billion for the seller, you NEED to use the $1 billion actually paid for the seller or these yields won't be correct. 3. If the Seller's "Yield" is higher, it's accretive - otherwise, if it's lower, it's dilutive... Think of it as the buyer getting MORE *from* the seller than what it's paying for the seller, vs. getting LESS than what it's paying. 4. How do you calculate the Weighted "Cost" of Acquisition? You need to calculate the after-tax "cost" of each component, since Net Income is also after-tax. After-Tax Cost of Cash = Foregone Cash Interest Rate * (1 - Buyer's Tax Rate) After-Tax Cost of Debt = Interest Rate on Debt * (1 - Buyer's Tax Rate) After-Tax Cost of Issuing Stock = 1 / Buyer's P/E Multiple (i.e. take the reciprocal of the buyer's P/E multiple) That last one is effectively the buyer's "after-tax yield"... For example, if you buy 1 share of the buyer's stock, it's the Net Income you'd be entitled to with that 1 share... So in this example, 1 / Buyer's P/E Multiple = 1 / 11.3 x = 8.9%. That means that for each $1.00 of United stock you buy, you get $0.089 in Net Income. Finally, you calculate the Weighted Average Itself with this formula: Weighted Average Cost of Acquisition = Cost of Cash * % Cash Used + Cost of Stock * % Stock Used + Cost of Debt * % Debt Used And if this weighted average cost of acquisition is greater than the seller's yield, it's dilutive - otherwise, if the weighted average cost of acquisition is lower than the seller's yield, it's accretive. LIMITATIONS: This trick doesn't hold up if the tax rates for the buyer and seller are different, especially if they're VERY different. This also doesn't work if you also factor in write-ups / write-downs, synergies, the cumulative impact of interest paid on debt and foregone interest on cash, merger closing costs, integration costs, etc... And it also doesn't work if the acquisition closes mid-year or in between fiscal years - you need to adjust for that with stub periods and the calendarization of financials... But this is a common interview question, so who cares! It's still very useful to know, and will save you a lot of time in interviews and on the job.
https://wn.com/Accretion_Dilution_Rules_Of_Thumb_For_Merger_Models
IRR vs. Cash on Cash Multiples in Leveraged Buyouts and Investments

IRR vs. Cash on Cash Multiples in Leveraged Buyouts and Investments

  • Order:
  • Duration: 14:01
  • Updated: 05 Aug 2014
  • views: 22863
videos
In this IRR vs Cash tutorial, you’ll learn the key distinctions between the internal rate of return (IRR). By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You will also learn further distinctions on the cash-on-cash multiple or money-on multiple when evaluating deals and investments – and you’ll understand why venture capital (VC) firms target one set of numbers, whereas private equity (PE) firms target a different set of numbers. http://youtube-breakingintowallstreet-com.s3.amazonaws.com/109-05-IRR-vs-Cash-on-Cash-Multiples.xlsx Table of Contents: 1:35 Why Do IRR and Cash-on-Cash Multiples Both Matter? 3:05 What Do Private Equity vs. Venture Capital vs. Other Firms Care About? 8:30 How to Use These Metrics in Real Life 11:08 Key Takeaways Lesson Outline: 1. Why Does This Matter? Because there are DIFFERENT ways to judge the success of a deal - 2 of the main ones for leveraged buyouts (LBOs), growth equity investments, and venture capital investments are the internal rate of return (IRR) and the cash-on-cash (CoC) or money-on-money (MoM) multiple. Many investment firms will care a lot about one of these, but not the other, and will try to find investments that yield a high IRR or a high multiple… but not both. The Difference: IRR factors in the time value of money - it's the effective, compounded interest rate on an investment. Whereas the multiple is simpler and ignores timing (e.g., $1000 / $100 = 10x multiple). 2. What Do Different Firms Care About? Most venture capital (VC) firms and early-stage investors want to earn a multiple of their money back - they don't care that much about IRR, because they're going to be invested for a VERY LONG time and it's not exactly liquid… and they don't care what the stock market does. VC firms must be able to cover their losses with “the winners”! If they get 2x their capital back in 1 year (100% IRR) and then lose everything on another investment in 5 years’ time (0% IRR), the first result is completely irrelevant because they've only earned back 1x their capital. Perfect Example: Harmonix, maker of Guitar Hero - got VC investment in the mid-1990's, generated $0 in revenue for 5+ years, and then in 2005 released the hit video game Guitar Hero. Sold for $175 million to Viacom in 2006! Massive multiple, but likely a pathetic IRR since it took 10+ years to get there. Later-stage investors and private equity firms care more about IRR because the multiples will never be that high in late-stage deals, and because they are benchmarked against the public markets (e.g., the S&P 500) more. If the firm's IRR can't beat the stock market, why should you invest? Most PE firms target at least a 20-25% IRR depending on the economy, deal environment, valuations, etc… less when things are bad, more in frothy times. This makes it common to do "quick flip" deals where the company is bought and then sold at a MUCH higher multiple right after - simply to get a high IRR. Real-Life Example: Thoma Bravo (mid-market tech PE firm) bought Digital Insight from Intuit for $1.025 billion, and then sold it 4 months later for $1.65 billion to NCR. VERY high IRR - 316%! But only a ~1.6x money multiple, assuming no debt / no debt repayment. http://dealbook.nytimes.com/2013/12/02/sale-to-ncr-is-a-quick-profitable-flip-for-a-private-equity-firm/ 3. How Do You Use These Metrics In Real Life? How to calculate them: see the Atlassian or J.Crew models. IRR is straightforward and uses built-in Excel functions, but for the CoC or MoM multiple, you need to sum up all positive cash flows in the period and divide by the sum of all negative cash flows in that period, and flip the sign. In the case of Atlassian, the deal is great for Accel because they earn a 15x multiple, even though the IRR is "only" 35%... they do not care AT ALL because they are targeting the multiple, not the IRR. For T. Rowe Price, the multiple of 1.9x isn't great, but they do at least get a 14% IRR which is probably what they care about more since they are late-stage investors. For the J. Crew deal, both the IRR and the multiple are very low and below what PE firms typically target, so this deal would be problematic to pursue, at least with these assumptions. 4. Key Takeaways IRR and Cash-on-Cash or Money-on-Money multiples are related, but often move in opposite directions when the time period changes. Different firms target different rates and metrics (VC/early stage - multiples, ideally over 10x or 3-5x later on; PE/late stage - IRR, ideally 20%+). Calculation: IRR is simple, use the built-in IRR or XIRR in Excel; for the multiple, sum the positive returns/cash flows, divide by the negative returns/cash flows and flip the sign. Judging deals: Focus on multiples for earlier stage deals (and if you're pitching VCs to fund your company), and focus on IRR for later stage / growth equity / PE deals.
https://wn.com/Irr_Vs._Cash_On_Cash_Multiples_In_Leveraged_Buyouts_And_Investments
What Is A Cash Merger?

What Is A Cash Merger?

  • Order:
  • Duration: 0:47
  • Updated: 10 Oct 2017
  • views: 29
videos
Definition of cash merger where an acquiring firm buys the target firm's stock with cash, instead more common practice exchanging it own definition out buying its a happens when company's. The acquirer can pay cash outright for all the equity shares of target company, paying what is an 'all deal'all mergers and acquisitions occur with no exchange stock; parent company purchases a majority common 7 aug 2017 merger mode payment business acquisition in which used to buy stock acquired firm instead striking about 1990s, however, way they're being deal, roles two parties are clear cut, but deals also be funded combination. In the event of a cash only merger transaction, exchange ratio is not excluding any effects, what actual based on stock mergers and acquisitions (m&a) are complex, involving many partiesairways begin discussions. What is cash merger? Definition and meaning businessdictionary. Cash merger meaning in the cambridge english dictionary. Cash received in mergers fairmark exchange ratio definition, formula and explanation. Capital gains tax share reorganisation, takeover or merger gov. Nov 2014 you must pay capital gains tax on any cash get as part of the takeover work out what proportion total shares (of that class) you're 1 2006 is a merger? The case for taxing mergers like stock salesin merger, neither assets nor in lieu fractional merger or spinoff, and reporting your broker reports could trigger warning flags irs can pick up does reverse mean my stocks? In takeovers, acquiring company agrees to certain dollar amount each share. What is a stock for merger and how does this corporate action all cash deal investopedia. Stock or cash? The trade offs for buyers and sellers in mergers the difference between cash & stock what is a forward merger? What cashout Definition of merger calculating gains. Occurs when the targeted firm's stockholders or shareholders do 8 sep 2015 corporations sometimes create merger transactions that exchange both cash and shares of one stock for a currently held tax rules depend on reason you received. What happens when you hold stock in a company that merges into another one? There are different tax corporate finance, tender offer is type of public takeover bid. In a cash merger, the acquirer uses to buy target company. What is cash merger? Definition and meaning businessdictionary what out the difference between & stock mergers budgeting money. First, let's be clear about what we mean by a stock for merger. How to report cash in lieu on schedule d the motley fool. What is a merger? The case for taxing cash law ecommons. What happens to stocks when companies merge? . The tender offer is a public, cash or securities may be offered to the target company's shareholders, although in which offers david offenberg, christo. What is the difference between all different types of stocks & symbols for same company? a merger formal type acquisition that combines two or more business enterprises were independent into single en
https://wn.com/What_Is_A_Cash_Merger
Merger Model Interview Questions: What to Expect

Merger Model Interview Questions: What to Expect

  • Order:
  • Duration: 18:39
  • Updated: 11 Oct 2016
  • views: 11401
videos
You’ll learn about the most common merger model questions in this tutorial, as well as what type of “progression” to expect and the key principles you must understand in order to answer ANY math questions on this topic. Table of Contents: 3:26 Question #1: The Basic Rules 5:23 Question #2: With Real Numbers 8:21 Question #3: Equity Value, Enterprise Value, and Valuation Multiples 12:17 Question #4: Ranges for the Multiples 14:26 Question #5: What if the Buyer is Twice as Big? 16:26 Recap, Summary, and Key Principles Question #1: The Basic Rules "A company with a P / E multiple of 25x acquires another company for a purchase P / E multiple of 15x. Will the deal be accretive or dilutive?" ANSWER: You can’t tell unless it’s a 100% Stock deal. If it is, it will be accretive because the Cost of Acquisition is 1 / 25, or 4%, and the Seller’s Yield is 1 / 15, or 6.7%. Since the Seller’s Yield is higher, it will be accretive. For Cash and Debt deals, or deals with a mix of all three, you’d calculate the Weighted Cost of Acquisition by using Foregone Interest Rate on Cash * (1 – Buyer’s Tax Rate) * % Cash + Interest Rate on Debt * (1 – Buyer’s Tax Rate) * % Debt + 1 / (Buyer’s P / E Multiple) * % Stock and compare that to the Seller’s Yield. Question #2: With Real Numbers “Let’s say it is a 100% Stock deal. The Buyer has 10 shares at a share price of $25.00, and its Net Income is $10. It acquires the Seller for a Purchase Equity Value of $150. The Seller has a Net Income of $10 as well. Assume the same tax rates for both companies. How accretive is this deal?” ANSWER: The buyer’s EPS is $10 / 10 = $1.00. It must issue 6 additional shares to do the deal, so the Combined Share Count is 10 + 6 = 16. Since both companies have the same tax rate and since no Cash or Debt is used, Combined Net Income = $10 + $10 = $20, and Combined EPS = $20 / 16 = $1.25, so the deal is 25% accretive. Question #3: Equity Value, Enterprise Value, and Valuation Multiples “What are the Combined Equity Value and Enterprise Value in this same deal? Assume that Equity Value = Enterprise Value for both the Buyer and Seller.” ANSWER: Combined Equity Value = Buyer’s Equity Value + Value of Stock Issued in the Deal = $250 + $150 = $400. Combined Enterprise Value = Buyer’s Enterprise Value + Purchase Enterprise Value of Seller = $250 + $150 = $400. The Combined EV / EBITDA multiple won’t be affected by the mix of Cash, Stock, and Debt, but the P / E multiple will be. It’s 20x here ($400 / $20), but it will change for non-100%-Stock deals. Question #4: Ranges for the Multiples “Without doing any math, what ranges would you expect for the Combined EV / EBITDA and P / E multiples, and why?” ANSWER: They should be somewhere in between the Buyer’s multiples and the Seller’s purchase multiples. It’s almost never a simple average because of the relative sizes of the Buyer and Seller – and for P / E, the purchase method also plays a role. Question #5: What if the Buyer is Twice as Big? "What happens if the Buyer is twice as big, i.e. it has an Equity Value of $500 and Net Income of $20?" ANSWER: The deal becomes *less* accretive because the company making it accretive, the Seller, now has a lower weighting. The Buyer was previously $250 / $400 of the total, but is now only $500 / $650, which is ~63% vs. ~77%, so we’d expect accretion to fall by 10-15%, which it does. The Combined Multiples will all be closer to the Buyer’s multiples now as well. Recap, Summary, and Key Principles Principle #1: If the Seller’s Yield is above the Weighted Cost of Acquisition, it’s accretive; dilutive if the opposite. Principle #2: Combined Equity Value = Buyer’s Equity Value + Value of Stock Issued in the Deal. Principle #3: Combined Enterprise Value = Buyer’s Enterprise Value + Purchase Enterprise Value of Seller. Principle #4: The Combined P / E Multiple is affected by the Cash / Debt / Stock mix, but the Combined EV / EBITDA Multiple is not. Principle #5: The Combined Multiples will be in between the Buyer’s multiples and the Seller’s purchase multiples – exact numbers depend on sizes of the Buyer and Seller. RESOURCES: https://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-11-Merger-Model-Interview-Questions-Slides.pdf https://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-11-Merger-Model-Interview-Questions.xlsx
https://wn.com/Merger_Model_Interview_Questions_What_To_Expect
Example of merger - Q1 to Q7  (Covered -practice manual)

Example of merger - Q1 to Q7 (Covered -practice manual)

  • Order:
  • Duration: 9:11
  • Updated: 09 Apr 2015
  • views: 6781
videos
Points covered in this video - 1. How to calculate exchange ratio 2. PRE (before) and post (after) merger Earnings Per Share calculation. 3. What it means - shareholders of company (acquired) are not at loss. 4. Market price post merger. 5. Value of Company after merger 6. Whether shareholders of both the Companies are better off? 7. Equivalent Earnings of Shares of B Ltd.
https://wn.com/Example_Of_Merger_Q1_To_Q7_(Covered_Practice_Manual)
That Mitchell And Webb Look - The Drunk Office

That Mitchell And Webb Look - The Drunk Office

  • Order:
  • Duration: 2:32
  • Updated: 24 Dec 2012
  • views: 491100
videos https://wn.com/That_Mitchell_And_Webb_Look_The_Drunk_Office
Why Do Stock Prices Often Drop After Mergers and Acquisition

Why Do Stock Prices Often Drop After Mergers and Acquisition

  • Order:
  • Duration: 3:39
  • Updated: 11 Sep 2008
  • views: 7488
videos
Professor Antonio Bernardo and student Feifei Li say acquiring firms are often overvalued. Visit UCLA Anderson School of Management http://www.anderson.ucla.edu/ Click here for more faculty videos from UCLA Anderson School of Management http://www.anderson.ucla.edu/x17273.xml
https://wn.com/Why_Do_Stock_Prices_Often_Drop_After_Mergers_And_Acquisition
Purchase Price in M&A Deals: Equity Value or Enterprise Value?

Purchase Price in M&A Deals: Equity Value or Enterprise Value?

  • Order:
  • Duration: 15:29
  • Updated: 10 Mar 2016
  • views: 23807
videos
In this tutorial, you’ll learn why the real price paid by a buyer to acquire a seller in an M&A deal is neither the Purchase Equity Value nor the Purchase Enterprise Value… exactly. http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 4:29: Problem #1: The Treatment of Debt 8:03: Problem #2: The Treatment of Cash 11:45: Recap and Summary Common questions: “In an M&A deal, does the buyer pay the Equity Value or the Enterprise Value to acquire the seller?” “What does it mean in press releases when they say the purchase consideration ‘includes the assumption of debt’? Does that mean the price is the Enterprise Value?” The Basic Definitions Equity Value: Value of ALL the company’s assets, but only to common equity investors (shareholders). Enterprise Value: Value of ONLY the core business operations, but to ALL investors (equity, debt, etc.). So when you calculate Enterprise Value, starting with Equity Value… Add Items When: They represent other investors (Debt investors, Preferred Stock investors, etc.) or long-term funding sources (Capital Leases, Unfunded Pensions) Subtract Items When: They are not related to the company’s core business operations (side activities, cash or excess cash, investments, real estate, etc.) The Confusion The problem is that many sources say Enterprise Value is what it “really costs to acquire a company.” But that’s not exactly true – yes, sometimes Enterprise Value is closer, but it depends on the deal terms and the items in Enterprise Value. We know, WITH CERTAINTY, that if you acquire 100% of a company, you must pay for 100% of its common shares. So the Purchase Equity Value is sort of a “floor” for the purchase price in an M&A deal. But should you really add the seller’s Debt, Preferred Stock, and other funding sources, and subtract 100% of the seller’s cash balance to determine the “real price”? There are many problems with that approach, but we’ll look at two of them here: PROBLEM #1: Does Debt really increase the purchase price? It depends, because debt can be either “assumed” (kept) or “refinanced” (replaced with new debt or paid off). Debt is Assumed: Does not increase the amount the buyer “really pays” for the seller. Debt is Repaid with the Buyer’s Cash: Does increase the amount the buyer “really pays”. Existing Debt is Replaced with New Debt: Increases the amount the buyer “really pays,” but the buyer still isn’t paying more cash. PROBLEM #2: Does Cash really reduce the purchase price? A buyer can’t just “take” a seller’s entire cash balance following a deal – all companies need a certain “minimum cash balance” to keep operating, paying the bills, etc. That portion of cash is actually a core business operating asset. Enterprise Value: As a simplification, we ignore the minimum cash and subtract all cash instead. So if a company operating by itself always needs some minimum amount of cash, it certainly still needs a minimum amount of cash in an M&A deal. Other Complications Transaction Fees: These always exist, and will always increase the price the buyer pays (lawyers, accountants, bankers, etc.). Unfunded Pensions, Capital Leases, etc.: These don’t necessarily have to be “paid” or “repaid” upon change of control… so they may not even affect the price, even though they factor into Enterprise Value. Extra Cash: What if the buyer’s cash + seller’s cash are used to fund the deal? Then the real price paid may not even be comparable to the seller’s Equity Value or Enterprise Value. The Bottom Line You have to distinguish between the *valuation* of a company or deal and the *actual price paid*. Equity Value and Enterprise Value are useful for valuation, but less useful for determining the real price paid. The real price paid may be between Equity Value and Enterprise Value, above them, or even below them, depending on the terms of the deal – due to the treatment of debt and cash, fees, and liabilities that don’t affect the cash cost of doing the deal. When you see language like “Including assumption of net debt,” that means the approximate Purchase Enterprise Value for the deal, because they are calculating it as Purchase Equity Value + Debt – Cash. But it’s still not what the buyer actually pays – it’s just a way to value the deal and get multiples like EV / EBITDA. RESOURCES: https://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-10-Purchase-Price-MA-Deals.pdf
https://wn.com/Purchase_Price_In_M_A_Deals_Equity_Value_Or_Enterprise_Value
Bill Gross on Market Outlook, Henderson Merger

Bill Gross on Market Outlook, Henderson Merger

  • Order:
  • Duration: 10:12
  • Updated: 07 Jun 2017
  • views: 2727
videos
Jun.07 -- Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund, talks about his current market view as he expects lower returns and holds a large cash position. He speaks with Bloomberg's Erik Schatzker on "Bloomberg Markets."
https://wn.com/Bill_Gross_On_Market_Outlook,_Henderson_Merger
Mergers and Acquisitions

Mergers and Acquisitions

  • Order:
  • Duration: 56:28
  • Updated: 06 Jul 2015
  • views: 5976
videos
Describes the different types of corporate takeovers and the sources of gains (if any) from these takeovers. Explains the differences between stock and cash transactions.
https://wn.com/Mergers_And_Acquisitions
TATA-Bharti Airtel Merger is Now Going to be a Reality | CNBC TV18

TATA-Bharti Airtel Merger is Now Going to be a Reality | CNBC TV18

  • Order:
  • Duration: 33:46
  • Updated: 12 Oct 2017
  • views: 2755
videos
TTSL, TTML To merget their consumer mobile businesses with Bharti Airtel Merger on a Debt-free cash-free basis TATA CMB-AIRTEL CNBC-TV18 is India's No.1 Business medium and the undisputed leader in business news. The channel's benchmark coverage extends from corporate news, financial markets coverage, expert perspective on investing and management to industry verticals and beyond. CNBC-TV18 has been constantly innovating with new genres of programming that helps make business more relevant to different constituencies across India. India's most able business audience consumes CNBC-TV18 for their information & investing needs. This audience is highly diversified at one level comprising of key groups such as business leaders, professionals, retail investors, brokers and traders, intermediaries, self-employed professionals, High Net Worth individuals, students and even homemakers but shares a distinct commonality in terms of their spirit of enterprise. Subscribe to our Channel: https://www.youtube.com/user/CNBCTV18 Like us on Facebook: https://www.facebook.com/cnbctv18india/ Follow us on Twitter: https://twitter.com/CNBCTV18News Website: http://www.moneycontrol.com/cnbctv18/
https://wn.com/Tata_Bharti_Airtel_Merger_Is_Now_Going_To_Be_A_Reality_|_Cnbc_Tv18
Majority of Sprint shares vote to receive cash in merger

Majority of Sprint shares vote to receive cash in merger

  • Order:
  • Duration: 0:25
  • Updated: 08 Jul 2013
  • views: 24
videos
Majority of Sprint shares vote to receive cash in merger The majority of Sprint Nextel Corp shares elected to receive cash when Japan's SoftBank Corp's takes control of the company. About 53 percent of Sprint's outstanding shares voted to take money in preliminary election over the merger. http://news.yahoo.com/majority-sprint-shares-vote-receive-cash-merger-120455634.html http://www.wochit.com
https://wn.com/Majority_Of_Sprint_Shares_Vote_To_Receive_Cash_In_Merger
APG Cash Drawer and Cash Bases' customers profit from merger

APG Cash Drawer and Cash Bases' customers profit from merger

  • Order:
  • Duration: 3:34
  • Updated: 24 Feb 2016
  • views: 47
videos
Two companies are now one: The integration of APG Cash Drawer and Cash Bases has been taking place over the last six months. Stephen Bergeron, VP Global Marketing at APG/Cash Bases explains how both companies and their consumers profit from the merger.
https://wn.com/Apg_Cash_Drawer_And_Cash_Bases'_Customers_Profit_From_Merger
Merger Model: Assessment Centre Case Study

Merger Model: Assessment Centre Case Study

  • Order:
  • Duration: 24:15
  • Updated: 01 Jul 2014
  • views: 25489
videos
In this Merger Model tutorial, you'll learn how to complete a merger model case study exercise given at an assessment center. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You will also learn how to set up a simplified model, how to calculate accretion / (dilution) under different scenarios, and how to calculate the pro-forma credit stats and ratios for the combined company. http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-04-Merger-Model-Assessment-Center-Case-Study.pdf "Before" Excel File: http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-04-Merger-Model-AC-Case-Study-Before.xlsx "After" Excel File: http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-04-Merger-Model-AC-Case-Study-After.xlsx Table of Contents: 3:01 How to Interpret the Case Study and Model Requirements 5:18 Financial Information for Companies A and B 5:31 How to Calculate the Missing Information 8:02 Entering the Key Deal Assumptions 10:55 How to Combine the Income Statements 14:36 How to Calculate Accretion / (Dilution) and Credit Stats 16:46 Answering the Case Study Questions 21:06 Key Takeaways from the Case Study 22:39 Recap and Summary Step 1: Read and interpret the instructions... and understand where to cut corners! Requirements: Need to be able to change the purchase price and % debt and stock used... but cash and the foregone interest on cash are unnecessary, which simplifies things. Also, they've given us incomplete information in a few spots and we need to go through and calculate some figures for Company A and Company B, such as the shares outstanding. SKIP the formatting! Step 2: Enter the financial information for Company A and Company B. Fairly straightforward, but remember that we need to calculate a few additional numbers for this to work, such as the shares outstanding for each company and the Net Income and EPS, at least for the buyer. Step 3: Calculate the "missing information" - Net Income, EPS, and Share Counts. Start with Pre-Tax Income, then calculate Net Income based on the tax rates for both companies, and then EPS... not completely necessary for Company B, but definitely need it for Company A. Then, calculate the Share Count for both companies and the Enterprise Value (just for reference). Step 4: Go up to the top and enter the key assumptions, starting with Question #1. To save time, skip the (1 + Premium) * Share Price * # Shares calculation and just calculate the purchase price based on the premium to Company B's Market Cap instead -- same result either way. Calculate %s for debt and stock, then the amount of debt raised, debt interest rate, and shares issued. Then, fill in the information about the synergies -- no information on expenses here, so we leave it out. Step 5: Combine the Income Statements for Company A and Company B. Start with the Synergies, and then combine all the other line items, factoring in those synergies on top. Remember to factor in acquisition effects, such as additional interest expense. Calculate down to EPS, making sure you include the NEW shares issued in the transaction and increase Company A's share count as appropriate. Step 6: Calculate Accretion / (Dilution) and the Pro-Forma Credit Stats. Take the combined company's EPS and divide by the buyer's EPS and subtract 1. For the credit stats, the two key ones are the Leverage Ratio (Net Debt / EBITDA here) and the Coverage Ratio (EBITDA / Interest) - so calculate those each year. Step 7: Create sensitivities... if you have time. Here, we would argue it's pointless since it takes more time and effort to set them up, and they don't save much time beyond the model we already have -- so we're skipping this step. Step 8: What is the POINT of this case study exercise? Takeaway #1: Even if we pay a higher premium for a seller, the deal might be MORE accretive depending on the purchase method... debt tends to be less expensive than stock. Takeaway #2: Company B is a very cheap asset -- MUCH lower P / E and EV / EBITDA multiples than Company A. When a more expensive buyer acquires a much less expensive seller, the deal will almost always be accretive. Company B's significantly higher tax rate also makes a difference -- Company A gets "free money" after the acquisition since it's only paying 25% in taxes rather than 40%. Takeaway #3: Using debt tends to produce more accretion than stock, but it also produces higher leverage ratios and lower coverage ratios -- so there is a trade-off between accretion / (dilution) and the credit stats following the deal.
https://wn.com/Merger_Model_Assessment_Centre_Case_Study
Expense Synergies in Merger Models

Expense Synergies in Merger Models

  • Order:
  • Duration: 20:32
  • Updated: 07 Oct 2014
  • views: 8712
videos
In this expense synergies lesson, you'll learn why expense synergies matter, what they consist of, how they impact M&A deals. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You'll also learn and accretion / dilution, and 3 common mistakes that people make when incorporating synergies into models. Table of Contents: 3:45 Example of Expense Synergies (Office Consolidation) 7:57 Oversight #1: More Granular Estimates / Checks 11:37 Oversight #2: It Takes Time to Realize Synergies 14:39 Oversight #3: It Takes Money to Realize Synergies 17:39 How Does All of This Impact the Deal, Accretion / (Dilution), and So On? 18:34 Recap and Summary Why do Synergies matter? And what are they exactly? Put simply, they're cases where 1 + 1 = 3 in mergers and acquisitions. You combine 2 companies, and get MORE revenue than just the Buyer's revenue plus the Seller's revenue…or you get LESS in expenses than just the Buyer's expenses plus the Seller's expenses. Revenue Synergies are tough to estimate and are very error-prone… but sometimes they matter and can be calculated more precisely. Expense Synergies are more grounded in reality, because you look at what both companies are spending and decide what can be cut - at the very least, it's based on actual expenses incurred by both companies. Synergies matter because some deals require synergies to look good on paper (i.e., be accretive). And some deals are motivated primarily by synergies, such as this one with 2 very similar men's retailers merging. BUT… a lot of people get it wrong in 3 main areas when it comes to expense synergies in merger models: Oversight #1: More Granular Estimates / Checks Lots of models - even very complex ones - will just say something like, "$100 million in synergies per year!" This is NOT ideal. It's better to break out the synergies by specific functional areas, if not by specific employee counts, building rents, anticipated discounts on inventory purchases, and so on. In real life, as a banker, you don't really know enough to do this - need the input of both companies' CFOs and finance departments to make estimates. Oversight #2: It Takes Time to Realize Synergies No matter how evil the combined company is, it can't just take the "Death Star" approach and blow up entire divisions / buildings all at once… it takes time to realize synergies, even if you're simply laying off employees. And something like consolidating buildings or inventory purchases / processes takes even more time. Here: The company makes it easy in their investor presentation, since they give us the expected amounts that will be realized each year. Oversight #3: It Takes Money to Realize Synergies It's not just "free" to consolidate buildings or factories or shuffle people around… there are costs associated with all of that. Often labeled "Restructuring Costs" or "Integration Costs" or similar names. Could show up on the Income Statement or on the Cash Flow Statement or both… depends on the deal and the type of expenses. Here: The company makes it easy for us with its estimate of $100 million in Integration Costs "over the next 18 months" - so we allocate that over the first 2 years of the model. How Does All of This Impact the Deal, Accretion / (Dilution), and So On? If you factor in the time and money required, it always makes the deal less accretive or more dilutive… because it pushes the Combined Pre-Tax Income lower in earlier years due to: a) Some percentage less than 100% of synergies will be there; and b) CFS expenses will push down the company's debt repayment ability, thereby increasing interest expense from debt in the earlier years. Extra Resources http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-05-Mens-Wearhouse-Jos-A-Bank-Deal-Investor-Presentation.pdf
https://wn.com/Expense_Synergies_In_Merger_Models
National Finance offers 'cash buyout' to Oman Orix shareholders for merger

National Finance offers 'cash buyout' to Oman Orix shareholders for merger

  • Order:
  • Duration: 1:01
  • Updated: 15 May 2017
  • views: 69
videos
Merger Offer National Finance Company has decided to offer cash buyout to the shareholders of Oman Orix Leasing Company as part of the merger deal between the two leading leasing firms. Solar EOR Project The world’s largest solar-based enhanced oil recovery (EOR) project, Miraah, is expected to begin delivering steam by August this year. Sohar Port Hutchison, which is the container terminal operator at Sohar Port, has launched a new auto gate system at its terminal. Meetaq Islamic Finance Bank Muscat’s Meethaq Islamic financing receivables rose to OMR902 million as of March 31, 2017 compared to OMR665 million for the same period of 2016. Stock Market Share prices on the Muscat Securities Market edged down on selling pressure Website: http://timesofoman.com Facebook: http://facebook.com/timesofoman Twitter: http://twitter.com/timesofoman
https://wn.com/National_Finance_Offers_'Cash_Buyout'_To_Oman_Orix_Shareholders_For_Merger
Simple merger arbitrage with share acquisition | Finance & Capital Markets | Khan Academy

Simple merger arbitrage with share acquisition | Finance & Capital Markets | Khan Academy

  • Order:
  • Duration: 4:22
  • Updated: 12 May 2011
  • views: 43608
videos
Showing how a merger arbitrage player might act if they were sure that a transaction would go through. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/leveraged-buy-outs/v/basic-leveraged-buyout-lbo?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/mergers-acquisitions/v/price-behavior-after-announced-acquisition?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Companies often buy or merge with other companies using shares (which is sometimes less intuitive than when they use cash). This tutorial walks through the mechanics of how this happens and details what is likely to happen in the public markets because of the transaction (including opportunities for arbitrage). About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
https://wn.com/Simple_Merger_Arbitrage_With_Share_Acquisition_|_Finance_Capital_Markets_|_Khan_Academy
Cost of merger

Cost of merger

  • Order:
  • Duration: 9:06
  • Updated: 14 Nov 2015
  • views: 814
videos
Did you liked this video lecture? Then please check out the complete course related to this lecture, Advanced Financial Management - Mergers and Acquisitions with 20+ Lectures, 2+ hours content available at discounted price(only Rs.640) with life time validity and certificate of completion. https://www.udemy.com/draft/373106/?couponCode=YTB10A This course is about Advanced Financial Management - Mergers and Acquisitions. Often we come across, many big companies announcing Mergers and Acquisitions. We also see many times two or more companies in same line of activity getting merged, as well as companies in different line of activities. But why do they Merge? What is the benefit of merging the entities? How the companies are valued for the purpose of merger? How the purchase value is determined? You will have answers to all these questions in this course. Merger & Acquisitions are basically Investment decisions but made under uncertainty. Mergers are resorted to enhance the wealth for the owners / share holders. When two entities gets merged / acquired, wealth for the merged entity is expected to be higher than the wealth when they are individual entities. But, arriving at the value of the business to be merged is not an easy task because it would involve many complications like Legal issues, Tax Complications, Accounting effects on Financial Reports, etc. Hence, Mergers & Acquisitions are strategic decisions focusing on maximization of growth and value of the firm. In this course you will learn how to value the business as well as the strategic benefits to look for while considering merger. You will understand the two forms or structures in Merger and the valuation models covering 1. Asset Based Valuation. 2. Earnings or Dividend based Valuation. 3. Capital Asset Pricing Model based valuation. 4. Free cash flow model. The real benefit of merger can be measured only on the basis of price paid for the merger. Hence, valuation of business is the core element in the Merger. This course is presented in simple lecture style, to the point, focussing straight on the subject matter. This course has video lectures (black board writing model) explaning the concepts of Merger, Acquisitions, Synergy, Valuation Models, etc. This course is structured in self paced learning style. Take this course to understand the nuances in Valuation aspects of Merger and Acquisitions. • Category: Business What's in the Course? 1. Over 23 lectures and 3.5 hours of content! 2. Understand Why Business Entities opt for Merger 3. Understand different structures of Merger 4. Understand Strategic benefits of Merger 5. Understand Valuation Models related with Merger Course Requirements: 1. This is a basic level course. Students can take fresh approach to this course. 2. No prior knowledge in Financial Management is required. Who Should Attend? 1. Any one who is interested in Knowing about Valuation Aspects of Merger Deals 2. CA / CMA / CS / CPA / CFA / CIMA Students 3. Entrepreneurs 4. Finance Mangers
https://wn.com/Cost_Of_Merger
WACC, Cost of Equity, and Cost of Debt in a DCF

WACC, Cost of Equity, and Cost of Debt in a DCF

  • Order:
  • Duration: 17:56
  • Updated: 23 Sep 2014
  • views: 79433
videos
In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF impact variables like the Cost of Equity, Cost of Debt. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You'll also learn about WACC (Weighted Average Cost of Capital) - and why it is not always so straightforward to answer these questions in interviews. Table of Contents: 2:22 Why Everything is Interrelated 4:22 Summary of Factors That Impact a DCF 6:37 Changes to Debt Percentages in the Capital Structure 11:38 The Risk-Free Rate, Equity Risk Premium, and Beta 12:49 The Tax Rate 14:55 Recap and Summary Why Do WACC, the Cost of Equity, and the Cost of Debt Matter? This is a VERY common interview question: "If a company goes from 10% debt to 30% debt, does its WACC increase or decrease?" "What if the Risk-Free Rate changes? How is everything else impacted?" "What if the company is bigger / smaller?" Plus, you need to use these concepts on the job all the time when valuing companies… these "costs" represent your opportunity cost from investing in a specific company, and you use them to evaluate that company's cash flows and determine how much the company is worth to you. EX: If you can get a 10% yield by investing in other, similar companies in this market, you'd evaluate this company's cash flows against that 10% "discount rate"… …and if this company's debt, tax rate, or overall size changes, you better know how the discount rate also changes! It could easily change the company's value to you, the investor. The Most Important Concept… Everything is interrelated - in other words, more debt will impact BOTH the equity AND the debt investors! Why? Because additional leverage makes the company riskier for everyone involved. The chance of bankruptcy is higher, so the "cost" even to the equity investors increases. AND: Other variables like the Risk-Free Rate will end up impacting everything, including Cost of Equity and Cost of Debt, because both of them are tied to overall interest rates on "safe" government bonds. Tricky: Some changes only make an impact when a company actually has debt (changes to the tax rate), and you can't always predict how the value derived from a DCF will change in response to this. Changes to the DCF Analysis and the Impact on Cost of Equity, Cost of Debt, WACC, and Implied Value: Smaller Company: Cost of Debt, Equity, and WACC are all higher. Bigger Company: Cost of Debt, Equity, and WACC are all lower. * Assuming the same capital structure percentages - if the capital structure is NOT the same, this could go either way. Emerging Market: Cost of Debt, Equity, and WACC are all higher. No Debt to Some Debt: Cost of Equity and Cost of Debt are higher. WACC is lower at first, but eventually higher. Some Debt to No Debt: Cost of Equity and Cost of Debt are lower. It's impossible to say how WACC changes because it depends on where you are in the "U-shaped curve" - if you're above the debt % that minimizes WACC, WACC will decrease. Otherwise, if you're at that minimum or below it, WACC will increase. Higher Risk-Free Rate: Cost of Equity, Debt, and WACC are all higher; they're all lower with a lower Risk-Free Rate. Higher Equity Risk Premium and Higher Beta: Cost of Equity is higher, and so is WACC; Cost of Debt doesn't change in a predictable way in response to these. When these are lower, Cost of Equity and WACC are both lower. Higher Tax Rate: Cost of Equity, Debt, and WACC are all lower; they're higher when the tax rate is lower. ** Assumes the company has debt - if it does not, taxes don't make an impact because there is no tax benefit to interest paid on debt.
https://wn.com/Wacc,_Cost_Of_Equity,_And_Cost_Of_Debt_In_A_Dcf
Earnout Modeling in M&A Deals and Merger Models

Earnout Modeling in M&A Deals and Merger Models

  • Order:
  • Duration: 21:50
  • Updated: 12 May 2015
  • views: 9893
videos
In this tutorial, you’ll learn how and why earn-outs are used in M&A deals, how they appear on the 3 financial statements, and how they impact the transaction assumptions and combined financial statements in a merger model. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 1:28 What Earn-Outs Are and Why You Use Them 7:46 How Earn-Outs Show Up on the 3 Statements 12:21 How Earn-Outs Impact Purchase Price Allocation and Sources & Uses 16:02 How Earn-Outs Affect the IS, BS, and CFS in a Merger Model 19:12 Recap and Summary What Earn-Outs Are and Why You Use Them Instead of paying for a company 100% upfront, the buyer offers to pay some portion of the price later on – *if certain conditions are met.* Example: “We’ll pay you $100 million for your company now, and if you achieve EBITDA of $20 million in 2 years, we’ll pay you an additional $50 million then.” Earn-outs are VERY common for private company / start-up acquisitions in tech, biotech, pharmaceuticals, and related “high-risk industries.” EA acquired PopCap for $750 million upfront, and offered an earn-out that varied based on PopCap Games’ cumulative EBIT over the next 2 years. The schedule was as follows: 2-Year Earnings Under $91 Million: Nothing 2-Year Earnings Above $110 Million: $100 million 2-Year Earnings Above $200 Million: $175 million 2-Year Earnings Above $343 Million: $550 million Why Use an Earn-Out? You see them most often when the buyer and the seller disagree on the seller’s value or expected financial performance in the future. Earn-outs are a way for the buyer and seller to compromise and say, “We don’t really know how we’ll perform in the future, but if we reach a target of $X in revenue or EBITDA, you’ll pay us more for our company.” The buyer will almost always want to base the earn-out on the seller’s standalone Net Income, while the seller prefers to base it on revenue, partially so the seller can spend a silly amount to reach these revenue targets. As a compromise, EBIT or EBITDA are sometimes used. How Earn-Outs Show Up on the 3 Statements Balance Sheet: Earn-Outs are recorded as “Contingent Consideration,” a Liability on the L&E side. Income Statement: You record changes in the value of the Contingent Consideration here, i.e. if the probability of paying out the earn-out changes, you show it as a Loss or Gain here. It’s a Loss if the probability of paying the earn-out increases, and a Gain if the probability decreases. Cash Flow Statement: When the earn-out is paid out in cash to the seller, it’s a cash outflow here. You also have to add back or subtract changes in the Contingent Consideration value here, reversing what is listed on the Income Statement. How Earn-Outs Impact Purchase Price Allocation and Sources & Uses Earn-outs do not affect the Sources & Uses schedule for the initial transaction since no cash is paid out yet. Earn-outs *increase* the amount of Goodwill created in an M&A deal because they boost the Liabilities side of the Balance Sheet, which, in turn, requires higher Goodwill on the Assets side to balance it. How Earn-Outs Affect the IS, BS, and CFS in a Merger Model You tend to leave the Income Statement impact blank in a merger model unless you have detailed estimates for the seller’s future performance. You SHOULD factor in the cash payout of the earn-out on the combined Cash Flow Statement – you can assume a 100% chance of payout, or some lower probability. The payout will appear in Cash Flow from Financing and reduce cash flow and the company’s cash balance. RESOURCES: http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-08-Earnout-Modeling.pdf http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-08-JAZZ-Earnouts.pdf http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-08-EA-PopCap.pdf http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-08-EA-PopCap-2.pdf http://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-08-Earnout-Article-MA-Journal.pdf
https://wn.com/Earnout_Modeling_In_M_A_Deals_And_Merger_Models
Free Cash Flow: How to Interpret It and Use It In a Valuation

Free Cash Flow: How to Interpret It and Use It In a Valuation

  • Order:
  • Duration: 21:50
  • Updated: 20 May 2014
  • views: 96433
videos
You'll learn what "Free Cash Flow" (FCF) means, why it's such an important metric when analyzing and valuing companies. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You'll also learn how to interpret positive vs. negative FCF, and what different numbers over time mean -- using a comparison between Wal-Mart, Amazon, and Salesforce as our example. Table of Contents: 0:54 What Free Cash Flow (FCF) is and Why It's Important 2:26 What Positive FCF Tells You, and What to Do With It 3:56 What Negative FCF Tells You, and What to Do With It 4:38 Why You Exclude Most Investing and Financing Activities in the FCF Calculation 7:55 How to Use and Interpret FCF When Analyzing Companies 11:58 Wal-Mart vs. Amazon vs. Salesforce: Free Cash Flow Across Sectors 19:33 Recap and Summary What is Free Cash Flow? Normally it's defined as Cash Flow from Operations minus Capital Expenditures. Tells you the company's DISCRETIONARY cash flow - after paying for expenses and working capital requirements like inventory and capital expenditures, how much cash flow can it put to use for other purposes? If the company generates a lot of Free Cash Flow, it has many options: hire more employees, spend more on working capital, invest in CapEx, invest in other securities, repay debt, issue dividends or repurchase shares, or even acquire other companies. If FCF is negative, you need to dig in and see if it's a one-time issue or recurring problem, and then figure out why: Are sales declining? Are expenses too high? Is the company spending too much on CapEx? If FCF is consistently negative, the company might have to raise debt or equity eventually, or it might have to restructure itself or cut costs in some other way. Why Do You Exclude Most Investing and Financing Activities Other Than CapEx? Because all other activities are, for the most part, "optional" and non-recurring. A normal company does not NEED to buy stocks or issue dividends or repurchase shares... those are all optional uses of cash. All it NEEDS to do to keep its business running is sell products to customers, pay for expenses, and keep investing in longer-term assets such as buildings and equipment (PP&E). Debt repayment and interest expense are "borderline" because some variations of Free Cash Flow will include them, others will exclude them, and some will include interest expense but not debt principal repayment. How Do You Use Free Cash Flow? It's used in a DCF (or at least, a variation of it) to value a company; it's also used in a leveraged buyout (LBO) model to determine how much debt a company can repay. And you can calculate it on a standalone basis for use when comparing different companies. The key is to DIG IN and see why Free Cash Flow is changing the way it is - Organic sales growth? Artificial cost-cutting? Accounting gimmicks? Different working capital policies? IDEALLY, FCF will be increasing because of higher units sales and/or higher market share, and/or higher margins due to economies of scale. Less Good: FCF is growing due to cost-cutting, CapEx slashing, or FCF is growing in spite of falling sales and profits... because of a company playing games with Working Capital, non-core activities, or CapEx spending. Wal-Mart vs. Amazon vs. Salesforce Comparison Main takeaway here is that Wal-Mart's FCF is all over the place, but Cash Flow from Operations is MOSTLY growing, so that appears to be driven by the also growing organic sales. The company is doing some odd things with CapEx and Working Capital, which led to fluctuations in FCF - not exactly "bad" or "good," just neutral and requires more research. With Amazon, they've increased CapEx spending massively in the past 2 years so that has pushed down CapEx. CFO is growing, driven by organic revenue growth (no "games" with Working Capital), but it's very difficult to assess whether all that CapEx spending will pay off in the long-term. With Salesforce, FCF is definitely growing organically (Revenue growth leads directly to CFO growth, and CapEx varies a bit but not as much as with Amazon), but the company is also spending a ton on acquisitions... will it continue? If CapEx as a % of revenue stays low, it will most likely continue to spend on acquisitions - unlikely to issue dividends, repurchase shares, etc. since it's a growth company. Further Resources http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-10-Free-Cash-Flow.xlsx http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-10-Walmart-Financial-Statements.pdf http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-10-Amazon-Financial-Statements.pdf http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-10-Salesforce-Financial-Statements.pdf
https://wn.com/Free_Cash_Flow_How_To_Interpret_It_And_Use_It_In_A_Valuation
VW/Porsche Merger, Cash for Clunkers - Autoline Daily 207

VW/Porsche Merger, Cash for Clunkers - Autoline Daily 207

  • Order:
  • Duration: 7:49
  • Updated: 14 Aug 2009
  • views: 712
videos
The U.S. Department of Transportation expanded the cash-for-clunkers program yesterday. General Motors may sell the Chevy Volts lithium-ion battery pack to rival automakers. A new Top Gear controversy involving the Porsche Shooting Brake. All that and more, plus Jim Hall predicts what cars from today will be considered classics in the future.
https://wn.com/Vw_Porsche_Merger,_Cash_For_Clunkers_Autoline_Daily_207
Enterprise Value: Why You Add and Subtract Items

Enterprise Value: Why You Add and Subtract Items

  • Order:
  • Duration: 23:40
  • Updated: 03 Jun 2014
  • views: 23328
videos
In this Enterprise Value lesson we take a look at the rules of thumb to figure out what should be added or subtracted when you calculate it. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" This also covers a short case study based on Vivendi (a leading media/telecom conglomerate based in France), Everyone knows the definition of Enterprise Value: Take Equity Value, add Debt and Preferred Stock (and others), and subtract Cash... But WHY do you do any of that? Enterprise Value represents the value of the company's CORE BUSINESS OPERATIONS to ALL THE INVESTORS in the company - equity, debt, preferred stock, etc. So focus on OPERATIONAL ITEMS and ALL INVESTORS when thinking about what to include... and what to exclude! Table of Contents: 1:19 What Enterprise Value Means 2:10 The 3 Key Rules of Thumb 5:15 Walk-Through of Vivendi's Assets and What to Subtract 11:08 How to Determine the Proper Treatment for Certain Assets 12:33 Excel Calculations for Assets Subtracted 13:30 Walk-Through of Vivendi's Liabilities & Equity and What to Add 15:14 How to Determine the Proper Treatment for Certain Liabilities 17:04 Excel Calculations for Liabilities Added 18:57 The Equity Section and Noncontrolling Interests 19:45 Recap and Summary The Three Rules of Thumb: 1. Is this item a *long-term funding source* for the company? In other words, will the funds we raise from this item help fund our business for years to come? If so, you should ADD this item when calculating Enterprise Value! Examples: Debt, Preferred Stock, Noncontrolling Interests (Minority Interests), Capital Leases, Unfunded Pension Obligations, Restructuring/Environmental Liabilities... 2. Will this item cost an acquirer of the company something extra when they go to buy it? And is it NOT something that will be repaid out of the company's normal operating cash flows (e.g., Accounts Payable)? If so, ADD it when calculating Enterprise Value! Examples: Debt, Preferred Stock. 3. Is this item NOT an operating asset? In other words, could the company continue to operate even WITHOUT this particular asset and be fine? If so, SUBTRACT it when calculating Enterprise Value! (These items often "save acquirers money" when buying the company.) Examples: Cash, Liquid Investments, Net Operating Losses, Assets from Discontinued Operations or Assets Held for Sale... How Does Each Item In Our Analysis Satisfy This Criteria? ITEMS THAT YOU SUBTRACT: Cash - Non-operating asset, the company doesn't "need" it to run its business beyond a certain low, minimum level. Liquid Investments - Also non-operating, the company has no need to invest in the stock market if it sells normal products/services. Equity Investments - Non-operating, not recorded in this company's revenue/expenses, doesn't "need" it to run the business. Other Non-Core Assets - Typically items that will be sold off or discontinued soon, so they're the very definition of "non-operating." NOLs - Also non-operating since long-term tax savings from these are not required to run the business. ITEMS THAT YOU ADD: Debt - Long-term funding source, and an acquirer has to repay it. Preferred Stock - Long-term funding source, and an acquirer has to repay it. Noncontrolling Interests - Long-term funding source, but this one's mostly for *comparability*... the company has recorded 100% of revenue and expenses from this company, so we want to capture 100% of its value as well (see our dedicated lesson on this one). Unfunded Pension Obligations - They're a long-term funding source! "Work for us now, we'll pay you a bit less, but we'll take care of you when you retire! Really!" To the company, very much like super-long-term debt.... but owed to employees, not outside investors. Plus, an acquirer has to pay for these somehow... Capital Leases - Also a long-term funding source, sort of like debt used to fund PP&E... these leases are used to fund operations and must be repaid. Restructuring & Legal Liabilities - Increases the cost to an acquirer, and they are also "long-term funding" of a sort - "Instead of paying for these expenses right now, we'll take care of them far into the future and reflect that liability." The Bottom-Line The Enterprise Value calculation is always somewhat subjective, and you'll see it done different ways. Everyone agrees on certain items (Cash, Debt, Preferred Stock), but the treatment of others varies by group, firm, industry, etc. As long as you can justify and explain how you calculated it, you'll be fine - even if someone else wants to change it later. To do that, keep in mind the 3 key rules of thumb above. Further Resources http://youtube-breakingintowallstreet-com.s3.amazonaws.com/106-07-VIV-Equity-Value-Enterprise-Value.xlsx http://youtube-breakingintowallstreet-com.s3.amazonaws.com/106-07-VIV-Annual-Financial-Statements-Notes.pdf
https://wn.com/Enterprise_Value_Why_You_Add_And_Subtract_Items
Shannon and the Merger - Folsom Prison Blues (Johnny Cash cover)

Shannon and the Merger - Folsom Prison Blues (Johnny Cash cover)

  • Order:
  • Duration: 3:34
  • Updated: 11 May 2017
  • views: 7
videos
Shannon and the Merger - Jergel's Rhythm Grille - Folsom Prison Blues (4/23/17)
https://wn.com/Shannon_And_The_Merger_Folsom_Prison_Blues_(Johnny_Cash_Cover)
BEER CULTURE IS F*CKED?!

BEER CULTURE IS F*CKED?!

  • Order:
  • Duration: 9:00
  • Updated: 12 Oct 2016
  • views: 129703
videos
With the recent sale merger of SABMiller and InBev, it's looking like your hard earned cash is going to one giant company no matter which beer you decide to drink. -- LINKS: http://www.nytimes.com/2016/06/02/opinion/a-big-merger-may-flatten-americas-beer-market.html http://www.chicagotribune.com/business/ct-megabrew-ab-inbev-sabmiller-merger-20161010-story.html http://www.wsj.com/articles/craft-brewers-take-issue-with-ab-inbev-distribution-plan-1449227668 -- Follow us: http://twitter.com/ETCShow http://twitter.com/EliotETC http://twitter.com/RickyFTW
https://wn.com/Beer_Culture_Is_F_Cked
Bayer's $66B deal for Monsanto is biggest takeover of 2016

Bayer's $66B deal for Monsanto is biggest takeover of 2016

  • Order:
  • Duration: 1:53
  • Updated: 14 Sep 2016
  • views: 2201
videos
How will Bayer and Monsanto's all-cash $66 billion merger agreement impact shares? Varney & Co. with more.
https://wn.com/Bayer's_66B_Deal_For_Monsanto_Is_Biggest_Takeover_Of_2016
Majority of Sprint shares vote to receive cash in merger

Majority of Sprint shares vote to receive cash in merger

  • Order:
  • Duration: 0:25
  • Updated: 08 Jul 2013
  • views: 24
videos
Majority of Sprint shares vote to receive cash in merger The majority of Sprint Nextel Corp shares elected to receive cash when Japan's SoftBank Corp's takes control of the company. About 53 percent of Sprint's outstanding shares voted to take money in preliminary election over the merger. http://news.yahoo.com/majority-sprint-shares-vote-receive-cash-merger-120455634.html http://www.wochit.com
https://wn.com/Majority_Of_Sprint_Shares_Vote_To_Receive_Cash_In_Merger
The Inner Circle - Hard Knock Gamers Merger! Cash Prize Gaming Tournament!

The Inner Circle - Hard Knock Gamers Merger! Cash Prize Gaming Tournament!

  • Order:
  • Duration: 5:02
  • Updated: 19 Apr 2016
  • views: 95
videos
TicGn.com -~-~~-~~~-~~-~- Please watch: "Nintendo Switch Giveaway | Nintendo Switch Impressions" https://www.youtube.com/watch?v=GYIQhYRKldM -~-~~-~~~-~~-~-
https://wn.com/The_Inner_Circle_Hard_Knock_Gamers_Merger_Cash_Prize_Gaming_Tournament