Modelling for Divestitures

• This course is hands-on with practical examples and illustrations in excel exercises and case studies on financial risk modelling
• The trainer has qualified as a Chartered Accountant and is well qualified to understand both the accounting modelling and financial aspects of the workshop
• He has spent time working on building financial models to incorporate the financial effects of various types of transactional model

Divestiture Analysis and Modelling

This course examines the main divestiture modelling structures available to a firm. The advantages and drawbacks of each structure are explained and their balance sheet impact is analysed in detail. Excel exercises and cases are used throughout the course. Our main financial model case study will be the hypothetical divestiture of Primark from Associated British Foods plc. We will consider the impact on the group’s accounts under the various alternative divestment modelling structures. Individual exercises will be a performance to demonstrate the income statement and balance sheet impact of each structure. Key topics:

• Overview of divestiture alternatives available to firms

• Divestiture (private sale and IPO)
• Spin-off/ De-merger
• Split off
• Equity carve-out

• Creating the balance sheet post-deal

• Deconsolidation process
• Calculating the gain on disposal, including tax
• Tax basis vs. book basis of investment sold
• Dealing with non-controlling interests
• Adjusting the capital structured modelling of the business to be divested/restructured
• Proforma leverage ratios

• Use of sale proceeds and scenario analysis

• Operating investments (Capex or business modelling skills acquisitions)
• Investments in financial assets
• Repayment of debt
• Repurchase of shares
• Special dividend
• Proforma EPS analysis, including using relative P / Es

After graduating from Cambridge University in 1993, the trainer worked as an auditor with Arthur Andersen, gaining a comprehensive knowledge of corporate accounting and financial statements. He qualified as a chartered accountant (ACA) and then worked in investment banking in the City of London, initially with HSBC and subsequently at Merrill Lynch. Throughout his time in the City, he was in a front-office role, advising companies on valuation, financing, acquisitions, foreign exchange and derivatives. This breadth of practical experience together with his passion for sharing and communicating knowledge, naturally then led him towards a career in financial training.