POPULAR MODEL FOR ASSET GROWTH INSIGHTS TO BE GAINED FROM THE POPULAR ASSET GROWTH MODEL SOME CAVEATS ABOUT THE POPULAR SELF-SUSTAINABLE GROWTH MODEL OF ASSETS NOTES CHAPTER 7: Acquisition Search and Deal Origination: Some Guiding Principles INTRODUCTION SOME PRINCIPLES OF ACQUISITION SEARCH CASE STUDY: KESTREL VENTURES LLC SUMMARY NOTES
10 PART Three: Diligence, Valuation, and Accounting CHAPTER 8: Due Diligence INTRODUCTION THE CONCEPT OF DUE DILIGENCE DUE DILIGENCE PRINCIPLES AND STRATEGIES PROCESS: TIMING, TEAM, AND OUTPUTS TARGET’S VIEW: PRESSURE AND THE DATA ROOM WHAT TO LOOK FOR: FOCUS ON KNOWLEDGE SOURCING INFORMATION EXCELLENCE IN DUE DILIGENCE APPENDIX 8.1 Comprehensive Overview of Due Diligence: Knowledge, Information, Data LEGAL ISSUES ACCOUNTING ISSUES TAX ISSUES INFORMATION TECHNOLOGY ISSUES RISK MANAGEMENT ISSUES ENVIRONMENTAL ISSUES MARKET PRESENCE AND SALES ISSUES OPERATIONS ISSUES REAL AND PERSONAL PROPERTY ISSUES INTELLECTUAL AND INTANGIBLE ASSETS ISSUES FINANCE ISSUES CROSS-BORDER ISSUES ORGANIZATION AND HUMAN RESOURCES ISSUES CULTURE ISSUES Data ETHICS ISSUES NOTES CHAPTER 9: Valuing Firms INTRODUCTION RULE #1: THINK LIKE AN INVESTOR RULE #2: INTRINSIC VALUE IS UNOBSERVABLE; WE CAN ONLY ESTIMATE IT RULE #3: AN OPPORTUNITY TO CREATE VALUE EXISTS WHERE PRICE AND INTRINSIC VALUE DIFFER RULE #4: SO MANY ESTIMATORS, SO LITTLE TIME— IT HELPS TO HAVE A VIEW RULE #5: EXERCISE ESTIMATORS OF INTRINSIC VALUE TO FIND KEY VALUE DRIVERS AND BETS RULE #6: THINK CRITICALLY; TRIANGULATE CAREFULLY RULE #7: FOCUS ON PROCESS, NOT PRODUCT RULE #8: WHEN IN DOUBT, SEE RULE #1 VALUATION CASE: CHRYSLER CORPORATION, MARCH 1998 APPENDIX 9.1 Value Merge.xls: When and How to Use the Model WHEN TO USE THE MODEL GOOD PRACTICE: EXERCISING THE MODEL LAYOUT AND CONTENTS MODELING RULES NOTES CHAPTER 10: Valuing Options OVERVIEW OPTION BASICS OPTION PRICING THEORY OPTION APPLICATIONS A PRACTICAL GUIDE TO VALUING FINANCIAL OPTIONS CONCLUSION: FIVE GENERAL LESSONS FOR THE M&A DEAL DESIGNER NOTES CHAPTER 11: Valuing Synergies THE CONCEPT OF SYNERGY WHEN ONE THINKS LIKE AN INVESTOR SYNERGY ESTIMATES MUST BE A CENTRAL FOCUS OF M&A ANALYSIS A FRAMEWORK FOR SYNERGY ANALYSIS ESTIMATING SYNERGY VALUE, WITH EXAMPLES SYNERGIES IN THE DAIMLER/CHRYSLER MERGER RULES OF THUMB CONCLUSION: OBJECTIVITY ABOVE ALL ELSE NOTES CHAPTER 12: Valuing the Firm across Borders INTRODUCTION HOW BORDERS AFFECT M&A VALUATION STRATEGY FOR DCF APPROACH: HOME VERSUS FOREIGN VALUATION ADJUSTING CASH FLOWS ESTIMATING THE DISCOUNT RATE FOR FOREIGN CASH FLOWS RECAPITULATION: VALUATION PROCESS WITH ADJUSTED CAPM VALUATION CASES ACROSS BORDERS SUMMARY