Mergers & Acquisitions and Leveraged Buyouts Modelling Workshop

Monday, March 19

09.00 - 09.15 Welcome and Introduction

09.15 - 12.00

Introduction to M&A and LBO

  • Overview of the course
  • Why firms pursue mergers and acquisitions
  • Problems associated with mergers and acquisitions
  • Attributes of successful acquisitions
  • Types of deals
  • Deal time line and stages of an acquisition

Model Design Best Practice

  • Model layout and design
  • Spreadsheet design best practice
  • Design standard
  • Model building steps

Practical: producing a model template using best practice

12.00 - 13.00 Lunch

13.00 - 17.00

Mergers Model

  • Building financial statements
  • Modelling the financial impact of the transaction
  • Worked integration example

Practical: completing operating statements

Post-Merger Ratio Analysis

  • Developing the post-acquisition balance sheet
  • Financing considerations
  • Risk matrix and apportionment

Practical: Completing template

Synergy and success factors

  • Integration and Sensitivity
  • Types of synergies
  • Valuing operating and financing synergies
  • Analysing the results

Practical: calculating required synergies

Tuesday, March 20

09.00 - 12.00

Modelling LBO Financial Statements

  • Outline of LBO case study
  • Review of financing structures
  • Modelling cash flow
  • Adding debt repayments

Model completion - cash flow and capital structure

Valuation Framework

  • Free cash flows
  • Underlying assumptions in a forecast cost of capital
  • Calculated cost of debt
  • Target debt capacity
  • Value drivers and terminal methods

Model completion - discount rates, terminal value and initial valuation

12.00 - 13.00 Lunch

13.00 - 17.00

Adjusting for Management Incentives

  • Value enhancing measures
  • Incentives to participants
  • Financial covenants
  • Model completion - cover ratios, decision factors
  • Cover ratios and key multiples

Practical: adjusting for covenants

Sensitivity and Optimisation

  • Sensitivity analysis
  • Scenario analysis
  • Optimisation techniques

Practical: Adding sensitivity and scenarios

Model Summary and Presentation

  • Management summary
  • Dynamic charts
  • Presenting key findings
  • User feedback
  • Version control

Evaluation and Termination of the Workshop

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