Mergers and Acquisitions Playbook - Mark A. Filippell

Mergers and Acquisitions Playbook

Lessons from the Middle-Market Trenches
Buch | Hardcover
336 Seiten
2010
John Wiley & Sons Inc (Verlag)
978-0-470-62753-2 (ISBN)
47,08 inkl. MwSt
The ultimate "tricks of the trade" guide to mergers and acquisitions Mergers and Acquisitions Playbook provides the practical tricks of the trade on how to get maximum value for a middle-market business.
The ultimate "tricks of the trade" guide to mergers and acquisitions

Mergers and Acquisitions Playbook provides the practical tricks of the trade on how to get maximum value for a middle-market business. This book uniquely covers how to prepare for a sale, how to present the business most positively, and how to control the sale timetable.



Written in a straight-talking style
Provides the tricks of the trade on how to get maximum value for a middle-market business
Shows how the sellers can take capitalize their inherent "unfair advantages"
Examines the differences between "value" and "currency"
Explains how to handle bankruptcy and distress company sales
Offers tips on managing your lawyers in the documentation process

Filled with empirical examples of successful-and unsuccessful-techniques, this practical guide takes you through every step of the M&A process, from how to manage confidentiality, how to create competition (or the impression of competition), to what to do once the deal is closed.

MARK A. FILIPPELL is a co-founder and Managing Director at Western Reserve Partners, an M&A boutique. He has nearly thirty years of investment banking experience and has personally completed over 125 merger and acquisition transactions. Prior to co-founding Western Reserve Partners, he was the manager of the Mergers & Acquisitions Department at KeyBanc Capital Markets and McDonald Investments. His clients have included Eaton, Novar Electronics, Claymont Steel Holdings, Liqui-Box, General Electric, Computational Systems, Excel Mining Systems, and MascoTech.

Preface xiii

Acknowledgments xvii

Chapter 1 Why People Sell Businesses 1

Honesty Is the Best Policy 2

Most Common Reasons People Sell 4

Retirement 5

Differences among Co-Owners 5

Illness or Death 6

Change in Strategic Position 7

Financial Sponsor Liquidity Event 8

Financial Pressure 9

Unsolicited Offer 9

Proactively Making the Sale Decision 10

Notes 11

Chapter 2 Should the Seller Hire an Intermediary? 13

What Do Investment Bankers Do, Anyway? 14

Criteria for Selecting an Investment Banker 19

General M&A Experience 19

Specific M&A Experience 19

Marketing Philosophy 20

Contacts 20

Temperament 22

Investment Banker Fees 23

Choosing the Right Investment Banker 29

Notes 32

Chapter 3 What Is the Business Worth? 33

Valuation Methodologies 34

Book Value 34

Multiple of Some Measure of Earning Power or Cash Flow 36

Intangibles Such as Technology or Market Position 38

The Synergy a Seller Could Provide a Buyer 39

Applying Valuation Theory to Real-World Situations 42

Cases Where Dividing the Business Created Value 43

Cases Where a Strategic Buyer Unlocked Value 47

Notes 50

Chapter 4 The Difference between “Value” and “Currency” 51

Mediums of Exchange in M&A 52

Cash 52

Notes 52

Stock 54

Stock Options 56

Contingent Payments 57

Sale of a Company’s Stock 59

Notes 61

Chapter 5 Taking Advantage of the Seller’s Unfair Advantages: Prepping and Timing 63

Preparation 64

Environmental Issues 64

Lawsuits 66

Tidy up the Financial Statements 67

Cosmetic Issues 68

Web Site Upgrades 68

Management Changes 68

Timing 71

Long-Term Timing Dimension 71

Short-Term Timing Dimension 73

Involving the Management Team 75

(Not) Involving Company Employees 80

Informing the Workforce 81

Dealing with Leaks 82

Conclusion 86

Notes 87

Chapter 6 Preparing the Documents 89

The Offering Memorandum 90

Executive Summary 91

Industry Description (Optional) 92

The Business 92

Financial Review 100

Exhibits 103

The Executive Summary 106

The Management Presentation 110

The Data Room 112

The Definitive Purchase Agreement 116

Notes 116

Chapter 7 Identifying and Cultivating the Right Buyers 117

Strategic Buyers 118

Financial Sponsors 125

Diversification Parties 132

Employee Stock Ownership Plans 133

Management 136

Family Members 139

Notes 141

Chapter 8 How Many Buyers to Approach? 143

Negotiated Sale 144

Limited Auction 150

Broad Auction 152

Notes 155

Chapter 9 Approaching Prospective Buyers 157

Confidentiality 158

Distributing the Offering Memorandum to Buyers 165

Securing Buyers’ Indications of Interest 168

Appendix 9A: Confidentiality Agreement 174

Appendix 9B: Sample Process Letter 179

Appendix 9C: Indication of Interest 181

Notes 183

Chapter 10 Management Presentations and Plant Tours 185

Management Presentations 186

Management Presentation Blocking and Tackling 186

Practice Makes Perfect 189

Management Presentation Pitfalls 189

Facility Tours 190

Next Steps 193

Notes 194

Chapter 11 Negotiating the Purchase Price 197

The Letter of Intent 198

Case-Specific Negotiating Strategies 201

Case 1: One Clearly Superior Offer 202

Case 2: Four Comparable Offers 204

Case 3: A “High Price with Tough Terms” Offer versus a “Lower Price with Reasonable Terms” Offer 206

Case 4: Three Offers with High Prices and Tough Terms 207

Case 5: One High Price Offer with Tough Terms 208

Case 6: Six Offers with Different Forms of Consideration 209

Case 7: Five Offers with Different Legal Structures and Different Forms of Consideration 213

Negotiating Dynamics 215

Appendix 11A: Letter of Intent 217

Notes 223

Chapter 12 Moving from Letter of Intent to Closing 225

The Negotiating Dynamics Have Reversed 226

Exclusivity 226

Maintaining Performance between the LOI and Closing 227

Negotiating Out the Purchase Agreement 229

Buyer Due Diligence 230

Hart-Scott-Rodino Filing 232

Keeping the Closing Process on Track 234

What if It’s Not Meant to Be? 237

Seller’s Exposure if the Buyer Does Not Close 237

Interim Milestones and Backup Buyers 238

Appendix 12A: Definitive Purchase Agreement 240

Notes 247

Chapter 13 Sales Forced by Bankruptcy or Financial Duress 249

The Painful Decision to Act 250

Time Is of the Essence 251

Senior Lender Dynamics 252

Secured Party Sales 256

Sales Engineered before Filing, but Closed in Bankruptcy Court 257

Sales Engineered and Closed in Bankruptcy Court 259

Notes 267

Chapter 14 Working with Lawyers 269

Legal Involvement from Day One 270

The Lawyer’s Distinct Role 270

Deal Makers versus Deal Breakers 271

Retaining the Right M&A Lawyer 272

The Legal Check-Up 274

Collaborating with the Investment Banker 274

Drafting and Negotiating the Purchase Agreement 275

Effective versus Ineffective Lawyering 278

Managing the M&A Lawyer 280

Appendix 14A: Seller’s Attorney Pretransaction Checklist 281

Note 288

Chapter 15 After the Sale Has Closed 289

Post-Closing Immediate Cooperation 290

Employee Notification 290

Customer Notification 291

Supplier Notification 292

General Public Notification 292

The Month Following Closing 293

Alternative Notification Methodology 293

Post-Closing Subsequent Matters 295

Post-Closing Hubris 296

Post-Closing Legal Matters 297

Post-Closing Financial Matters 298

Taxes 299

Charitable Giving 300

Investments 303

New Horizons 304

Leveling the Playing Field 305

Notes 305

About the Author 307

Index 309

Erscheint lt. Verlag 30.12.2010
Reihe/Serie Wiley Professional Advisory Services
Zusatzinfo Tables: 4 B&W, 0 Color; Exhibits: 7 B&W, 0 Color
Verlagsort New York
Sprache englisch
Maße 160 x 231 mm
Gewicht 522 g
Themenwelt Wirtschaft Betriebswirtschaft / Management Finanzierung
Wirtschaft Betriebswirtschaft / Management Planung / Organisation
ISBN-10 0-470-62753-0 / 0470627530
ISBN-13 978-0-470-62753-2 / 9780470627532
Zustand Neuware
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