Advisory Services - Mergers & Acquisitions Flashcards Preview

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Flashcards in Advisory Services - Mergers & Acquisitions Deck (20):
1

What's the main idea of M&A

1+1 = 3. Total is greater than the sum of the parts.

2

What's defensive M&A

Acquiring a company before the competitor does

3

Company's lifecycle

Development -> Growth -> Maturity - > Decline

4

Three types of M&A process

a) 1:1 private transaction b) Auctions c) Acquiring Listed Companies

5

Equity = ?

Equity = Value of Firm's shares

6

Enterprise Value = ?

Enterprise Value = Equity Value + NET DEBT

7

Different methods to come up with valuation?

DCF, Multiples, LBO, Listed Price

8

Tens of variables involved.....

in a firm's valuation

9

Which is the most popular valuation method?

DCF

10

Which is the most advanced valuation technique

LBO

11

What's the consideration received?

It's the offer amount received by the target company

12

How the target companies get paid in?

They get paid in cash, stock or combination

13

How "available cash" helps in M&A deal?

They help in acquiring companies fast if the right opportunity comes along

14

What's earn-out mechanism?

It is the additional amount of money that the target receives if it meets certain conditions after the transaction

15

the combination of the two.....

will be greater than the sum of the individual parts

16

What are the two different types of buyers?

Corporate buyer and financial buyer

17

Who is a corporate buyer?

Buyer from the same industry

18

Who is a financial buyer

Venture Capital Fund - Startup companies, Private Equity - Growth companies, LBO Fund - Mature Companies

19

what's management integration?

in the corporate buyout, management teams will be integrated after the closing of the transaction

20

Corporate vs Financial Buyer

Corporate buyer is looking for long-term Synergies while the Financial buyer has a short-term horizon and is looking to better the financial and efficiency of the target firm so it can be sold at a profit