Preface ix
PART ONE The Big Picture
CHAPTER 1
The Global M&A Market: Current Status and Evolution 3
CHAPTER 2
U.S. M&A History, Trends, and Differences from Other Nations 9
CHAPTER 3
The Need for Growth Spurs Acquirers to Buy Other Companies 15
CHAPTER 4
The Three Financial Tactics That Dominate the M&A Business 25
PART TWO Finding a Deal
CHAPTER 5
The Buyer Must Have a Methodical Plan in Order to Find a Quality Transaction 39
CHAPTER 6
To Begin an Acquisition Search, the Buyer First Sets the Likely Parameters of a Deal 43
CHAPTER 7
The Buyer Starts the Formal Acquisition Search by Alerting Intermediaries and Contacting Possible Sellers 47
CHAPTER 8
Finding a Deal: Likely Results of a Search 59
CHAPTER 9
The Four Principal Risks Facing a Buyer in the M&A Business 65
PART THREE Target Financial Analysis
CHAPTER 10
Sizing Up the M&A Target from a Financial Point of View 77
CHAPTER 11
To Facilitate Financial Projections, the Buyer Needs to Classify the Target as a Mature, Growth, or Cyclical Business 91
CHAPTER 12
How Practitioners Forecast an M&A Target’s Sales and Earnings 97
PART FOUR Acquisition Valuation
CHAPTER 13
The M&A Industry Typically Uses Four Valuation Methodologies 109
CHAPTER 14
The Use of Discounted Cash Flow in M&A Valuation 113
CHAPTER 15
Valuing M&A Targets Using the Comparable Public Companies Approach 123
CHAPTER 16
Valuing an M&A Target by Considering Comparable Deals and Leveraged Buyouts 133
CHAPTER 17
Valuation Situations That Don’t Fit the Standard Models 143
PART FIVE Combination, the Sale Process, Structures, and Special Situations
CHAPTER 18
Combining the Buyer’s and Seller’s Financial Results for the M&A Analysis 159
CHAPTER 19
When Is the Best Time for an Owner to Sell a Business? 167
CHAPTER 20
The Sale Process from the Seller’s Vantage Point 173
CHAPTER 21
A Review of Legal and Tax Structures Commonly Used in Transactions 183
CHAPTER 22
Unusual Transaction Categories 193
CHAPTER 23
Final Thoughts on Mergers and Acquisitions 199
About the Author 201
Index 203