Mergers, Acquisitions, and Other Restructuring Activities - 6th Edition - ISBN: 9780123854858, 9780123854865

Mergers, Acquisitions, and Other Restructuring Activities

6th Edition

An Integrated Approach to Process, Tools, Cases, and Solutions

Authors: Donald DePamphilis
eBook ISBN: 9780123854865
Hardcover ISBN: 9780123854858
Imprint: Academic Press
Published Date: 22nd August 2011
Page Count: 784
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Description

Two strengths distinguish this textbook from others.  One is its presentation of subjects in the contexts where they occur.  Students see different perspectives on subjects and learn how complex and dynamic the mergers and acquisitions environment is.  The other is its use of current events.  Of its 72 case studies, 3/4 are new or have been updated.  The implications of Dodd-Frank and US Supreme Court rulings affecting the Sarbanes-Oxley Act, among other regulatory changes, are developed to enhance teaching and learning experiences.  Other improvements to the 6th edition have shortened and simplified chapters, increased the numbers and types of pedagogical supplements, and expanded the international appeal of examples.  With a renewed focus on empirical  and quantitative examples, the 6th edition continues to demonstrate how people work together on mergers and acquisitions and why the actions of specific individuals have far-reaching implications.

Key Features

  • Presents an integrated approach to the activities involved in mergers, acquisitions, business alliances, and corporate restructurings.
  • All chapters have been revised, updated, and contain new content, and 14 include more extensive changes. Structural revisions make chapters more streamlined, shorter, and less complex.
  • Case studies cover a dozen industries, and 75% are new or have been updated. All include discussion questions and answers. 

Readership

Undergraduate and graduate students worldwide working on mergers & acquisitions, corporate restructuring, business strategy, management, and entrepreneurship. 

Table of Contents

Dedication

List of Business Case Studies

Preface

Acknowledgments

About the Author

PART I. The Mergers and Acquisitions Environment

Introduction

Chapter 1. Introduction to Mergers and Acquisitions

Inside M&A: dell moves into information technology services

Chapter overview

Mergers and Acquisitions as Change Agents

Why Mergers and Acquisitions Happen

Merger and acquisition waves

Why It Is Important to Anticipate Merger Waves

Alternative forms of corporate restructuring

Friendly versus hostile takeovers

The role of holding companies in mergers and acquisitions

The role of employee stock ownership plans in M&As

Business Alliances as Alternatives to Mergers and Acquisitions

Participants in the Mergers and Acquisitions Process

Alternative investors and lenders

Activist Investors and M&A Arbitrageurs

Do M&As pay off for shareholders, bondholders, and society?

Why some M&As fail to meet expectations

Long-term performance

Some things to remember

Chapter business cases

Chapter 2. Regulatory Considerations

Inside M&A: The limitations of regulation and the lehman brothers meltdown

Chapter overview

Federal securities laws

Antitrust laws

Dodd-frank wall street reform and consumer protection act

State Regulations Affecting Mergers and Acquisitions

National Security-Related Restrictions on Direct Foreign Investment in the United States

The U.S. foreign corrupt practices act

Fair disclosure (regulation FD)

Regulated Industries

Environmental laws

Labor and benefit laws

Cross-border transactions

Some Things to Remember

Chapter Business Cases

Chapter 3. The Corporate Takeover Market

Inside M&A: kraft sweetens its offer to overcome cadbury's resistance

Chapter overview

Alternative models of corporate governance

Factors that affect corporate governance

Alternative takeover tactics in the corporate takeover market

What makes the aggressive approach successful?

Other tactical considerations

Developing a bidding or takeover strategy

Alternative takeover defenses in the corporate takeover market

The impact of takeover defenses on shareholder and bondholder value

Some things to remember

Chapter business cases

PART II. The Mergers and Acquisitions Process: Phases 1 through 10

Introduction

Chapter 4. Planning: Developing Business and Acquisition Plans

Inside M&A: Nokia's Gamble to Dominate the Smartphone Market Falters

Chapter Overview

A Planning-Based Approach to M&As

Phase 1: Building the Business Plan

The Business Plan as a Communication Document

Phase 2: Building the Merger–Acquisition Implementation Plan

Some Things to Remember

Chapter Business Cases

Chapter 5. Implementation: Search through Closing

Inside M&A: bank of america acquires merrill lynch

Chapter overview

Phase 3: the search process

Phase 4: the screening process

Phase 5: first contact

Phase 6: negotiation

Phase 7: developing the integration plan

Phase 8: closing

Phase 9: implementing postclosing integration

Phase 10: conducting a postclosing evaluation

Some things to remember

Chapter business cases

Chapter 6. Integration

Inside M&A: general electric's water business fails to meet expectations

Chapter overview

The role of integration in successful M&As

Viewing integration as a process

Integrating business alliances

Some things to remember

Chapter business cases

PART III. Merger and Acquisition Valuation and Modeling

Introduction

Chapter 7. A Primer on Merger and Acquisition Cash-Flow Valuation

Inside M&A: the importance of distinguishing between operating and nonoperating assets

Chapter overview

Required returns

Analyzing risk

Calculating free cash flows

Applying income or discounted-cash-flow methods

Valuing firms subject to multiple growth periods

Valuing firms under special situations

Using the enterprise method to estimate equity value

Valuing nonoperating assets

Putting it all together

Some things to remember

Chapter business cases

Chapter 8. Applying Relative, Asset-Oriented, and Real-Option Valuation Methods to Mergers and Acquisitions

Inside M&A: a real-options perspective on microsoft's dealings with Yahoo!

Chapter overview

Applying relative-valuation (market-based) methods

Applying asset-oriented methods

The replacement cost method

Valuing the firm using the weighted-average method

Analyzing mergers and acquisitions in terms of real options

Determining when to use the different approaches to valuation

Which valuation methods are actually used in practice

Some things to remember

Chapter business cases

Chapter 9. Applying Financial Modeling Techniques

Inside M&A: HP buys EDS—the role of financial models in decision making

Chapter overview

Limitations of financial data

The model-building process

Using financial models in support of M&A negotiations

Alternative applications of M&A financial models

Some things to remember

Chapter business cases

Chapter 10. Analysis and Valuation of Privately Held Companies

Inside M&A: cashing out of a privately held enterprise

Chapter overview

Demographics of privately held businesses

Governance issues in privately held and family-owned firms

Challenges of valuing privately held companies

Process for valuing privately held businesses

Step 1: adjusting financial statements

Step 2: applying valuation methodologies to privately held companies

Step 3: developing discount (capitalization) rates

Step 4: applying control premiums, liquidity, and minority discounts

Reverse mergers

Using leveraged employee stock ownership plans to buy private companies

Empirical studies of shareholder returns

Some things to remember

Chapter Business Cases

PART IV. Deal-Structuring and Financing Strategies

Introduction

Chapter 11. Structuring the Deal

Inside M&A: pfizer acquires wyeth labs despite tight credit markets

Chapter overview

The deal-structuring process

Form of acquisition vehicle and postclosing organization

Legal form of the selling entity

Form of payment or total consideration

Managing risk and closing the gap on price

Using collar arrangements to preserve shareholder value

Form of acquisition

Some things to remember

Chapter business cases

Chapter 12. Structuring the Deal

Inside M&A: continued consolidation in the generic pharmaceuticals industry

Chapter overview

General tax considerations and issues

Taxable transactions

Tax-free transactions

Other tax considerations affecting corporate restructuring

Financial reporting of business combinations

Impact of purchase accounting on financial statements

International accounting standards

Recapitalization accounting

Some things to remember

Chapter business cases

Chapter 13. Financing Transactions

Inside M&A: Kinder Morgan Buyout Raises Ethical Questions

Chapter Overview

Characterizing Leveraged Buyouts

How do LBOS create value?

When Do Firms Go Private?

Financing Transactions

Common Forms of Leveraged Buyout Deal Structures

Prebuyout and Postbuyout Shareholder Returns

Using DCF Methods to Value Leveraged Buyouts

LBO Valuation and Structuring Model Basics

Some Things to Remember

Chapter Business Cases

PART V. Alternative Business and Restructuring Strategies

Introduction

Chapter 14. Joint Ventures, Partnerships, Strategic Alliances, and Licensing

Inside M&A: microsoft partners with yahoo! —an alternative to takeover?

Chapter overview

Motivations for business alliances

Critical success factors for business alliances

Alternative legal forms of business alliances

Strategic and operational plans

Resolving business alliance deal-structuring issues

Empirical findings

Some things to remember

Chapter business cases

Chapter 15. Alternative Exit and Restructuring Strategies

Inside M&A: Bristol-Myers Squibb Splits off the Rest of Mead Johnson

Chapter Overview

Commonly Stated Motives for Exiting Businesses

Divestitures

Spin-Offs

Equity Carve-Outs

Split-Offs and Split-Ups

Tracking, Targeted, and Letter Stocks

Voluntary Liquidations (Bust-Ups)

Comparing Alternative Exit and Restructuring Strategies

Choosing among Divestiture, Carve-Out, and Spin-Off Restructuring Strategies

Determinants of Returns to Shareholders Resulting from Restructuring Strategies

Some Things to Remember

Chapter Business Cases

Chapter 16. Alternative Exit and Restructuring Strategies

Inside M&A: calpine emerges from the protection of bankruptcy court

Chapter overview

Business failure

Voluntary settlements with creditors outside of bankruptcy

Reorganization and liquidation in bankruptcy

Analyzing strategic options for failing firms

Failing firms and systemic risk

Predicting corporate default and bankruptcy

Valuing distressed businesses

Empirical studies of financial distress

Some things to remember

Chapter business cases

Chapter 17. Cross-Border Mergers and Acquisitions

Inside M&A: inbev buys an american icon for $52 billion

Chapter overview

Distinguishing between developed and emerging economies

Globally integrated versus segmented capital markets

Motives for international expansion

Common international market entry strategies

Structuring cross-border transactions

Financing cross-border transactions

Planning and implementing cross-border transactions in emerging countries

Valuing cross-border transactions

Empirical studies of financial returns to international diversification

Some things to remember

Chapter business cases

Glossary

Index

Details

No. of pages:
784
Language:
English
Copyright:
© Academic Press 2011
Published:
Imprint:
Academic Press
eBook ISBN:
9780123854865
Hardcover ISBN:
9780123854858

About the Author

Donald DePamphilis

Donald M. DePamphilis has a Ph.D. in economics from Harvard University and has managed more than 30 acquisitions, divestitures, joint ventures, minority investments, as well as licensing and supply agreements. He is currently Clinical Professor of Finance at the College of Business Administration at Loyola Marymount University in Los Angeles. He has also taught mergers and acquisitions and corporate restructuring at the Graduate School of Management at the University of California, Irvine, and Chapman University to undergraduates, MBA, and Executive MBA students. He has published a number of articles on economic forecasting, business planning, and marketing. As Vice President of Electronic Commerce at Experian, Dr. DePamphilis managed the development of an award winning Web Site. He was also Vice President of Business Development at TRW Information Systems and Services, Director of Planning at TRW, and Chief Economist at National Steel Corporation.

Affiliations and Expertise

Clinical Professor of Finance, Loyola Marymount University, Los Angeles, CA, USA

Reviews

"Mergers, Acquisitions, and Other Restructuring Activities, 6th ed. delivers an essential understanding of the corporate restructuring processes by combining insights from many case studies with academic rigor. The book points out how M&A can create value as well as the ways it can lead to value destruction. In addition to the state of the art valuation techniques, it also explains the regulatory corporate governance framework for both the US and Europe. It's an excellent text, and I highly recommend it."

- Luc Renneboog, Professor of Corporate Finance, CentER, Tilburg University

 

"Great text book that in a simple and straightforward manner combines the latest insights from academia with contemporary industry practices. It fits perfect in a class of MBA students or executives. I will for sure use it next time I teach M&A."

-Karin Thorburn, DnB Nor Professor of Finance, Norwegian School of Economics and Business Administration

 

"DePamphilis has masterfully covered in one book all relevant managerial, strategic, financial, accounting, legal and tax aspects of M&A into an easily understood roadmap for any M&A transaction, large or small. With totally up-to-date material, he provides the crucial information that is necessary in today's rapidly changing M&A world."

-Lloyd Levitin, Professor of Clinical Finance and Business Economics, University of Southern California

 

"Mergers, Acquisitions, and Other Restructuring Activities is quite simply an outstanding text.  Don DePamphilis delivers a comprehensive guide to the M&A process from start to finish.   The  reader is exposed to the latest thoughts on valuation methods as well as the myriad of alternative corporate asset restructuring decisions available to today’s managers and how to best evaluate each.  The book is punctuated with numerous up-to-date case examples as well as case study problems for analysis, giving the reader an immediate connection between the textual discussion and what we observe in practice.  I have no doubt the book’s content will appeal to a wide audience including students, instructors and practitioners.  I particularly like the chapters on valuation methods and the fact that the text is accompanied by excellent Excel spreadsheet models for executing a complete analysis.  In sum, Mergers, Acquisitions, and Other Restructuring Activities is a comprehensive, up-to-date, outstanding text."

-Scott C. Linn, R.W. Moore Chair in Finance and Economic Development, the University of Oklahoma

 

"After teaching M&A for ten years, I was relieved when last semester I finally switched to DePamphilis' text. His single book replaced numerous other sources that I had to use before. DePamphilis' academic rigor is combined with his deep personal experience as a deal maker, and thus the textbook is highly valuable to both newcomers and those being involved in transactions for many years."

-Viktoria Dalko, Global Professor of Finance, Harvard University Extension School