M&A Transaction Example: Microsoft Acquires LinkedInīarring leaks to the media, the first time the world will hear about a merger is usually through a merger announcement press release issued jointly by both companies. Poor due diligence, mismanaged integration and overestimation of potential cost savings are common reasons why mergers and acquisitions can fail. When M&A is unsuccessful, it can destroy value and especially hurt the buyer (since the seller is already cashed out). Meanwhile, the cost savings that might be achieved by the reduction of redundant jobs and infrastructure (called synergies) can be shared by both the buyer and seller: The anticipation of lower costs going forward allows the buyer to afford a higher purchase price. Achieve supply chain efficiencies (buying a supplier or customer is called vertical integration).Remove competition (buying a competitor is called horizontal integration).Accelerate time to market with new products and channels.When M&A is successful, it holds the promise of enhanced value to both the buyer and seller. For the buyer, it can: Learn More → Investment Banking Primer M&A Reward vs. We hope this proves to be a valuable resource that quickly gives you a real-world understanding of mergers and acquisitions without the need to comb through voluminous textbooks. Using Microsoft’s acquisition of LinkedIn as our primarily case study (and a couple of others along the way), we will break down the various parts of an M&A deal. Along the way, look for “Deep Dive” links that point to more specific details of the M&A process. The goal of this guide is to take a step back from complicated number crunching and shed light on how deals are negotiated, structured and consummated in the real world. In our role as a financial training company, we spend a lot of time in our classes explaining how to build M&A models. M&A Guide: Introduction to Mergers and Acquisitions Synergies in M&A and Accretion/Dilution.Compensation for LinkedIn management that stay on or are terminated (“golden parachute”).Treatment of Vested Options and Stock Based Awards (i.e.Treatment of Unvested Options and Stock Based Awards (i.e.Treatment of Dilutive Securities: Stock Options and Restricted Stock.Contingent Consideration and Earn-Outs in M&A.Purchase price working capital adjustments.Gap Period Between Announcement Date and Close.The Definitive Agreement (Merger Agreement). Calculating the Purchase Premium in M&A.M&A Form of Consideration (Cash vs Stock).M&A Transaction Example: Microsoft Acquires LinkedIn.M&A Guide: Introduction to Mergers and Acquisitions.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |