The Art M&A: A Merger Acquisition Buyout Guide - Hardcover

Reed, Stanley; Lajoux, Alexandra

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9781556237225: The Art M&A: A Merger Acquisition Buyout Guide

Hardcover

ISBN 10: 1556237227 ISBN 13: 9781556237225

Publisher: McGraw-Hill Education, 1994

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The Rules in the M&A Arena have changed. . .but the need for knowledge and careful planning remains! Organizations continue to de-conglomerate, delayer and downsize-turning thousands of valuable companies into prime candidates for mergers, acquisitions, leveraged buyouts, and strategic alliance. The Art of M&A, Second Edition is written for those who are pinpointing these targets, structuring the financing, and most important, closing the deals. This completely revised and up-to-date reference includes: Information on new methods of pricing, key guidelines for financing and refinancing, and valuable tax planning tips; Guidelines for merging compensation and benefits plans, buying troubled companies, and successfully conducting international transactions; Accurate and practical answers to more than 1,000 questions likely to be confronted when buying or selling companies, whether public of private, domestic or foreign.

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From the Author:

Expanded and Updated
Dear Readers:

Many of you who own the Second Edition of this title (published in 1995) may wonder what's new in the Third Edition (1999). For your convenience, here is the new Table of Contents.

As you can see, we have added three new chapters on:

� M&A Integration (Chapter 10)

� M&A in Family Businesses, Partnerships, Franchises, and Nonprofits (Chapter 13)

� Spin-Offs and Strategic Alliances (Chapter 14)

The Third Edition also features an Epilogue that reviews the history of past merger waves, and makes predictions about the current "Megamerger Wave" now upon us.

Finally, we have updated the entire text.

We hope you find the new edition useful.

As always, we welcome your comments. (Our e-mail addresses are included in the new edition.)

Alexandra R. Lajoux (for Reed and Lajoux)

PS: Scroll down for our new Table of Contents.

The Art of M&A A Merger/Acquisition/Buyout Guide Third Edition Stanley Foster Reed Alexandra Reed Lajoux

CHAPTER 1: GETTING STARTED IN MERGERS AND ACQUISITIONS Introduction. Basic Terms. Concluding Comments.

CHAPTER 2 PLANNING AND FINDING Introduction. Strategic Planning for Operating Companies. In-house Search. Brokers and Finders. Using Intermediaries. Role of Investment and Commercial Banks in M&A. General Regulatory Considerations for Buyers. Antitrust Considerations for Acquisitions. Hart-Scott-Rodino. Concluding Comments. Appendix 2A-Revision to the Horizontal Merger Guidelines Issued by the U.S. Department of Justice and the Federal Trade Commission.

CHAPTER 3 VALUATION AND PRICING Introduction. Valuation Fundamentals. Pricing Issues. Expressing The Purchase Price in the Acquisition Agreement. Concluding Comments. Exhibit 3-1-Estimating the Cost of Capital.

CHAPTER 4 FINANCING AND REFINANCING Introduction. Highly Leveraged Transactions. Minimizing Borrowing. Pros and Cons of Preserving Debt and Lease Obligations. Determining Financing Structure. Senior Debt. Sale Leasebacks. The Bank Book and Commitment Letter. Fraudulent Conveyance and Other Litigation Concerns. Other Principal Issues in Senior Loan Agreements. Insurance Company Financing. Junk Bonds. Bridge Loans. Equity Investment Funds. Seller Takeback Financing. Registration Rights. Intercreditor Issues. Subordination Issues. Intercreditor Agreements. Refinancing Issues. Concluding Comments. Appendix 4A-Typical Subordination Provisions of Publicly Issued Notes. Appendix 4B-Typical Subordination Provisions of Privately Placed Institutional Notes. Appendix 4C-Typical Subordination Provisions of Seller Notes.Exhibit 4-1, Installment Sale Models.

CHAPTER 5 STRUCTURING M/A/B TRANSACTIONS: GENERAL, TAX, AND ACCOUNTING CONSIDERATIONS Introduction. General Considerations. Tax Considerations. Accounting Considerations. Concluding Comments. Transaction Diagrams [Figure 5-1 through Figure 5-11.].

CHAPTER 6 THE DUE DILIGENCE INQUIRY Introduction. Getting Started. Litigation Analysis. Environmental Exposure Analysis. Emerging Legal Issues. Do-It-Yourself Due Diligence. Assessing Information. Duration of Due Diligence. Concluding Comments. Appendix 6A-Due Diligence Checklist. Appendix 6B-Sample Confidentiality Agreement.

CHAPTER 7 PENSION, LABOR, AND COMPENSATION CONCERNS Introduction. Compensation Basics. Employee Benefit Plans. Determining Plan Assets and Liabilities and Their Effect on Company Books. Plan Split-Ups and Partial Terminations. Underfunded and Overfunded Plans. Employee Stock Ownership Plans. ESOP Securities Issues. Using Non-ESOP Stock Plans. Plans Holding Stock. Effect of Corporate Structure. Problems in Acquisitions of Unionized Companies. Concluding Comments.

CHAPTER 8 NEGOTIATING THE ACQUISITION AGREE- MENT AND THE LETTER OF INTENT Introduction. The Letter of Intent. The Acquisition Agreement. Components of the Agreement. Introductory Material. Representations and Warranties. Covenants. Conditions to Closing. The Indemnity Section. Termination Procedures. Auctions. Acquisitions from an Affiliated Group. Transactions Involving Public Companies. Negotiating and Documenting An MBO. Employment Agreements. Stockholders' Agreements. Concluding Comments. Appendix 8A-Sample Letter of Intent. Appendix 8B-Typical Merger Agreement and Commentary.

CHAPTER 9 CLOSING Introduction. The Basics of Closing. Pre-Closing. Closing. Wire Transfers. Post-Closing. Planning Aids. Closing Memorandum. Concluding Comments. Appendix 9A-Merger of Target Acquisition Corp. into Target Co. Inc., Closing Memorandum.

CHAPTER 10 POSTMERGER INTEGRATION Introduction. Postmerger Performance: The Basics. Integration Elements in the Acquisition Agreement. The Integration Plan. The Role of Outsiders in Planning M&A Integration. Communicating the Integration Plan. Integrating Human Resources. Integrating Assets (on Paper and in Reality). Integrating Commitments to Employees. Concluding Comments. Appendix 10A-Principles of Business: The Caux Roundtable. Appendix 10B-A Master Checklist for Postmerger Integration.

CHAPTER 11 WORKOUTS, BANKRUPTCIES, AND LIQUIDATIONS Introduction. Workouts. Bankruptcies. Prepackaged Bankruptcies. State Insolvency Procedures. Investment Opportunities. Bankruptcy Information Sources. Concluding Comments.

CHAPTER 12 SPECIAL ISSUES FOR M&A IN PUBLIC COMPANIES Introduction. Legal and Business Considerations. Tender Offer Basics. Proxy Solicitation Disclosures. Merger Disclosure Issues. Director Responsibilities in Responding to Unsolicited Bids. Insider Trading. Financing the Public Transaction. Considerations Applicable to Hostile Acquisitions. Antitrust Defenses. Restructuring Defenses. Poison Pills. Charter and Bylaw Amendments. Defensive Sales or Acquisitions. Defensive Payments. Related State Laws. Concluding Comments.

CHAPTER 13 M&A IN FAMILY-OWNED BUSINESSES, PARTNERSHIPS, FRANCHISES, AND NONPROFITS Introduction. Family Businesses. Partnerships. Franchises. Nonprofits. Concluding Comments.

CHAPTER 14 BEYOND M&A: SPIN-OFFS AND STRATEGIC ALLIANCES Introduction. Spin-Offs. Strategic Alliances. Concluding Comments. Appendix 14A-The AT&T Spin-Offs. Appendix 14B-The Joint Venture Agreement: A Checklist from the Regional and Economic Development Services of Saskatchewan, Canada. Appendix 14C-Diagrams of Spin-Offs, Split-Offs, and Split-Ups.

CHAPTER 15 SPECIAL TOPICS RELATING TO TRANSACTIONS WITH INTERNATIONAL ASPECTS Introduction. Nontax Issues Regarding Foreign Investment in the United States (Inbound). Nontax Issues Regarding U.S. Investments Abroad. International Tax and Disclosure Considerations. Tax Considerations in Inbound Acquisitions. Tax Considerations in Outbound Acquisitions. Concluding Comments.

EPILOGUE: M&A IN THE NEW MILLENNIUM Introduction. The Megamerger Wave. The "Merger Wave" Concept. Problems with the Merger Wave Concept. The First Wave (Crest: 1890s). The Second Wave (Crest: 1920s). The Third Wave (Crest: 1960s). The Fourth Wave (Crest: 1980s). The Fifth Wave (Crest: 1990s). The Sixth Wave (Crest: ?). M&A: The Ultimate Entrepreneurship.

CASE: A WHEEL OF OPPORTUNITY/FIT CHART CASE STUDY: J.T. SMITH CONSULTANTS.

TABLE OF CASES

LANDMARK LEGAL CASE SUMMARIES

INDEX

From the Back Cover:

The classic book on M&A��covering all aspects of mergers, acquisitions, and buyouts. The Art of M&A continues to be the one-stop, no-nonsense reference for executives facing the day-to-day challenges of combining two or more companies into one. Completely revised and updated, The Art of M&A's handy Q&A format asks and answers more than 1,000 critical M&A questions, including:

Planning and Finding: How does a search-and-screen hunt for a likely acquisition target begin? What types of fees or guarantees can a "finder" expect for brokering a prospective deal? What are the best Internet sites for dealmaking information?
Valuation and Pricing: How can activity-based costing uncover hidden values in a company? What happens when a company's selling price is based on its current stock price��and the stock plummets? What are the "traps of undue optimism" that every buyer must guard against?
Financing and Refinancing: How can a buyer conduct proper due diligence without harming its relationship with the seller? What should an acquirer include in a thorough due diligence checklist? What information should be considered material in a litigation review?
Postmerger Integration: What critical ingredients should be in a postmerger plan? How are intangibles valued, and how can they be integrated into the new company? What are the restrictions on communications between merging companies?
Plus...new sections that can ensure a smooth postmerger integration and reveal the keys to success in spin-offs and strategic alliances.

You'll also find sample documents��a typical merger agreement, letter of intent, and due diligence and postmerger integration checklists. Let The Art of M&A, Third Edition, serve as your advisor and walk you step by step through a smooth and successful M&A procedure.

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