case study interview

Question 1

calculation for assets

Answer 1

Assets = liabilities + equity

Question 2

warranties

Answer 2

Awarrantyis a type of guarantee that a manufacturer or similar party makes regarding the condition of its product. Awarrantyis a promise of indemnity if the assertion is false.

Question 3

representations

Answer 3

Arepresentationis an assertion as to a fact, true on the date therepresentationis made, that is given to induce another party to enter into a contract or take some other action.

Question 4

indemnities

Answer 4

security against or exemption from legal liability for one’s actions.

Question 5

Why do people undertake m&A?

Answer 5

§ Increasing market share
§ Capturing synergies
§ Taking advantage of supply chain benefits
§ Diversifying products and or services
§ Increasing value to shareholders

Question 6

o Various issues arising in mergers

Answer 6

§ How might a minority shareholder be protected by a majority shareholder
		§ Lacking motivation for acquisition 
		§ Targeting wrong company 
		§ Overpaying 
		§ Too extreme risks 
		§ Inadequate due diligence
		§ Losing trust of important stakeholders 
		§ Failed integratio

Question 7

how to work out working capital

Answer 7

o Working capital (equity) = current assets - current liabilities

Question 8

ebitda

Answer 8

o EBITDA = EarningsBeforeInterest (depends on financial structure),Taxes (depends on country of operation),Depreciation (decline of tangible fixed assets e.g. buildings, vehicles), andAmortization (decline of intangible assets e.g. patents)
○ EBITDA = net income + tax + interest expense + depriciation and amortisation
○ EBITDA = Operating Profit + Depreciation + Amortization

Question 9

pestle

Answer 9

• PESTLE: political, economic, sociological, technological, legal and environmental
  § External influences
  § Sources of information and analysis
  § Some factors = more important

Question 10

swot

Answer 10

• SWOT: strengths, weaknesses, opportunities and threats
  § Need to know objectives of organisation
  § Strategy technique

Question 11

corporate restructuring

Answer 11

o Corporate restructuring = changing structure of company to focus on more profitable areas or to increase money
§ 3 main models:
· asset acquisition - buyer buys assets of selling company
□ Can decide which assets to buy
□ High tax costs
· stock purchase - assets not directly transformed
□ Control of assets and liabilities = transferred
□ Low tax, less expensive, legal or financial liabilities
· merger - two businesses combining

Question 12

docs in m&a

Answer 12

§ Team sheet - states terms and conditions. Legally binding

§ Letter of intent - not legal binding

Question 13

lawyers role in m&a

Answer 13

§ Negotiate and draft agreements 
		§ Due diligence - verifying information passed on 
		§ Arrange financing/investment 
		§ Completion of transaction 
		§ Post-completion procedures

Question 14

current issues for m&a

Answer 14

§ M&A = strong in 2019
§ Shrink in M&A activity from covid - focusing on funds of own business
§ M&As postponed will hopefully help growth
§ Fear of tariffs
§ CMA has tightened merger control
· The EU has similarly adopted a harder enforcement line, with the proposed merger between Siemens AG and Alstom SA blocked by the Commission over concerns the deal would smother train-equipment market competition.

Question 15

general structure for presentation

Answer 15

o Introduction to myself
o Maybe exec summary?
o Outline background of situation
§ Factual background
§ Root out key Commercial drives
o Analysis
§ Go through section and provide suggestions - link to commercial implications and relevant law
§ Are they the only options
§ Practical considerations - what are the risks
§ Reputational issues? Conflict of interests?
§ How does law apply to their questions?
§ Do you have any further questions you want them to clarify?
o Advice on overall situation and how to proceed
o Thank you very much for your time…