Applied Mergers and Acquisitions. Robert F. Bruner

NOTES CHAPTER 13: Valuing the Highly Levered Firm, Assessing the Highly Levered Transaction INTRODUCTION THE WORLD OF HIGHLY LEVERED FIRMS EFFECT OF LEVERAGE ON VALUE OF THE FIRM “WHOLE DEAL” APPROACH TO EVALUATING THE HIGHLY LEVERED FIRM AND TRANSACTION A LEVERAGED RECAPITALIZATION: KOPPERS COMPANY A LEVERAGED BUYOUT: MEDIMEDIA INTERNATIONAL, LTD. A LEVERAGED BUYOUT: REVCO DRUG STORES SUMMARY NOTES CHAPTER 14: Real Options and Their Impact on M&A INTRODUCTION WHERE REAL OPTIONS APPEAR IN M&A IF OPTIONALITY IS SO PERVASIVE, WHY NOT VALUE EVERYTHING AS AN OPTION? HOW TO ASSESS THE IMPACT OF REAL OPTIONS FOUR MINI-CASES IN THE ANALYSIS OF REAL OPTIONS SUMMARY AND CONCLUSIONS NOTES CHAPTER 15: Valuing Liquidity and Control INTRODUCTION ADJUSTING VALUES FOR DISCOUNTS AND PREMIUMS WHERE DO ILLIQUIDITY DISCOUNTS COME FROM? LIQUIDITY IS AN OPTION WHERE DO CONTROL PREMIUMS COME FROM? CONTROL IS AN OPTION INTERACTION OF LIQUIDITY AND CONTROL MINI-CASE: ATTEMPTED ACQUISITION OF VOLVO BY RENAULT, 1993 CONCLUSION NOTES CHAPTER 16: Financial Accounting for Mergers and Acquisitions INTRODUCTION OVERVIEW OF PURCHASE ACCOUNTING HOW TO INTERPRET REPORTED FINANCIAL RESULTS IN AN M&A TRANSACTION LINKAGE AMONG ACCOUNTING CHOICES, FORM OF PAYMENT, FINANCING, AND PRICE DANGERS OF EARNINGS MANAGEMENT SUMMARY AND CONCLUSIONS APPENDIX 16.1 Mechanics of Pooling-of-Interests Accounting NOTES CHAPTER 17: Momentum Acquisition Strategies: An Illustration of Why Value Creation Is the Best Financial Criterion INTRODUCTION: FOUR CAUTIONARY TALES MOMENTUM ACQUISITION STRATEGIES ARGUMENTS FOR AND AGAINST MOMENTUM ACQUIRING VALUE CREATION IS THE BEST CRITERION FOR EVALUATING ACQUISITION STRATEGIES CONCLUSION: MOMENTUM STRATEGIES VERSUS VALUE STRATEGIES APPENDIX 17.1 An Analytic Model of EPS Dilution NOTES

      11  PART Four: Design of Detailed Transaction Terms CHAPTER 18: An Introduction to Deal Design in M&A INTRODUCTION DEAL STRUCTURES ARE SOLUTIONS TO ECONOMIC PROBLEMS POSSIBLE DESIRABLES IN DESIGNING A DEAL THE DESIGN OF TERMS CAN HELP ACHIEVE OBJECTIVES EACH DEAL IS A SYSTEM: THE “WHOLE DEAL” PERSPECTIVE SOME IMPLICATIONS FOR THE DEAL DESIGNER SUMMARY AND CONCLUSIONS NOTES CHAPTER 19: Choosing the Form of Acquisitive Reorganization INTRODUCTION: FIVE KEY CONCERNS FOR THE DEAL DESIGNER THE FORM OF REORGANIZATION HAS IMPORTANT IMPLICATIONS DEALS THAT ARE IMMEDIATELY TAXABLE TO THE SELLING SHAREHOLDERS DEALS THAT DEFER TAX TO THE SELLING SHAREHOLDERS SUMMARY AND IMPLICATIONS FOR THE DEAL DESIGNER AND SENIOR EXECUTIVE NOTES CHAPTER 20: Choosing the Form of Payment and Financing INTRODUCTION PATTERNS AND TRENDS IN FORM OF PAYMENT DOES FORM OF PAYMENT MATTER? CONSIDERATIONS IN SELECTING THE FORM OF PAYMENT ASSESSING THE FINANCING ASPECTS OF A DEAL SUMMARY AND CONCLUSIONS NOTES CHAPTER 21: Framework for Structuring the Terms of Exchange: Finding the “Win-Win” Deal INTRODUCTION A MODEL FOR CRITICALLY ASSESSING EXCHANGE RATIOS USES OF THESE MODELS AN ILLUSTRATION EXTENSION TO CASH-FOR-STOCK DEALS CHOOSING EXCHANGE RATIO TARGETS IN THE WIN-WIN ZONE