Advisory Services - Mergers & Acquisitions Flashcards

1
Q

What’s the main idea of M&A

A

1+1 = 3. Total is greater than the sum of the parts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What’s defensive M&A

A

Acquiring a company before the competitor does

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Company’s lifecycle

A

Development -> Growth -> Maturity - > Decline

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Three types of M&A process

A

a) 1:1 private transaction b) Auctions c) Acquiring Listed Companies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Equity = ?

A

Equity = Value of Firm’s shares

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Enterprise Value = ?

A

Enterprise Value = Equity Value + NET DEBT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Different methods to come up with valuation?

A

DCF, Multiples, LBO, Listed Price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Tens of variables involved…..

A

in a firm’s valuation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Which is the most popular valuation method?

A

DCF

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Which is the most advanced valuation technique

A

LBO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What’s the consideration received?

A

It’s the offer amount received by the target company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How the target companies get paid in?

A

They get paid in cash, stock or combination

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How “available cash” helps in M&A deal?

A

They help in acquiring companies fast if the right opportunity comes along

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What’s earn-out mechanism?

A

It is the additional amount of money that the target receives if it meets certain conditions after the transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

the combination of the two…..

A

will be greater than the sum of the individual parts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are the two different types of buyers?

A

Corporate buyer and financial buyer

17
Q

Who is a corporate buyer?

A

Buyer from the same industry

18
Q

Who is a financial buyer

A

Venture Capital Fund - Startup companies, Private Equity - Growth companies, LBO Fund - Mature Companies

19
Q

what’s management integration?

A

in the corporate buyout, management teams will be integrated after the closing of the transaction

20
Q

Corporate vs Financial Buyer

A

Corporate buyer is looking for long-term Synergies while the Financial buyer has a short-term horizon and is looking to better the financial and efficiency of the target firm so it can be sold at a profit