Modelling for Mergers & Acquisitions

M&A Analysis and Modelling

During this course, you will build a fully integrated merger financial model which combines financial statement forecasts for an acquirer and target company. Practical consolidation issues are addressed. The deal synergy analysis focuses on the financing structure, pricing, earnings and credit impact of the deal. The three main ways of determining value creation for acquirer shareholders are emphasised, namely EPS (Earnings per share) accretion/ (dilution), Return on Invested Capital and PV of M&A Synergies vs. Bid Premium paid.

As an M&A case study, we will consider the hypothetical acquisition model of Adidas by Nike and build both ‘short-form’ and ‘long form’ models.

Individual exercises will be undertaken to highlight the 3 key measures of value creation:

• EPS accretion/ (dilution)
• Return on Invested Capital
• Present Value of deal synergies vs. premium acquisition model paid to target shareholders 

 Key Topics:

• M&A Accounting for Deal Goodwill
• Preparing the stand-alone data for acquirer and target
• Preparing key deal data
• Building a flexible funding structure using a sources and uses of funds table
• Calculating deal goodwill
• Accounting for a Non-Controlling interest
• Enterprise Value to Equity Value bridge and deal adjustments in private M&A
• Dealing with fair value adjustments to the target's net assets
• Dealing with refinancing of target's debt
• Modelling fees (advisory, debt-issuance and equity-issuance)
• Consolidating the financial statements of acquirer and target
• Synergies
• Assessing the M&A valuation creation potential of the deal using: 
  • Earnings accretion / dilution and relative P / E analysis
  • Return on invested capital (ROIC) analysis
  • Net present value of synergies vs. control premium
• Contribution analysis M&A
• Impact on credit ratios and ratings
• Analysis at various prices (AVP)
• Identifying the maximum offer price and a suitable mix in project finance model 

After graduating from Cambridge University in 1993, our 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 and his passion for sharing and communicating knowledge naturally led him towards a career in financial training.

He has worked in financial training for the last ten years and delivered training courses on accounting, financial modelling, corporate finance, valuation and capital markets at investment banks, private equity and corporate finance firms worldwide.

• Learn how to build a standard M&A model, which analyses all the key financial issues on an M&A transaction (sufficient for pitch purposes).
• Learn how to build a fully integrated M&A model, combining acquirer and target financials into a 3-statement consolidation.

• Our M&A modelling course is a hands-on experience by using practical examples and illustrations in Excel exercises and case studies.
• The trainer has qualified as a Chartered Accountant and is well qualified to understand both the accounting and financial aspects of the workshop.
• He has spent time on building models that incorporate the financial effects of various types of transactions.

Our M&A modelling course is a ‘must know’ for:

• Corporate Financial professionals at all levels, with limited experience in M&A modelling.
• M&A professionals, seeking to identify and quantify value creation for their clients through the use of a mergers and acquisitions model.
• Financial Analysts seeking to refresh and develop their modelling skills in modelling the impact of acquisitions on a client’s financial statements as well as a better understanding of the accounting implications.