The Corporate Finance Modelling Masterclass

£3,000.00 +VAT

This course can also be presented face to face in-house or via live in-house webinar.

Corporate Finance Modelling Course Objectives:

Participant will:

  • Learn about the key drivers on M&A
  • Master the modelling of integrated financial statements
  • Learn how to use financial statements to value a business
  • Get grip with modelling the balance sheet impact of transactions
  • Gain an appreciation of incorporate synergies into modelling work
  • Learn how to differentiate between financing and operating synergies
  • Be taught how acquisitions can be structured
  • Learn how to work with integrated financial statements
  • Be shown how to develop the acquisition structure and modelling instruments
  • Become familiar with running scenarios, iterating and optimising
  • Learn about the LBO Market and the effect of leveraged on the value of a business
  • Get an overview of the LBO process, including how to determine the capital structure and assess the value creation.
  • Have explained to them how to value the target by sourcing information, building a DCF valution and comparing and contrasting DCF and the LBO model structure
  • Master the key elements of an LBO model including debt waterfalls
  • Gain an understanding of the debt capacity for LBO financing
  • Learn about the capital providers and their typical characteristics
  • Analyse value creation in a transaction

Corporate Finance Modelling Course Content:

Days 1, 2 & 3 – Modelling for M&A

M&A model build up: the starting point

  • Modelling integrated financial statements
  • Model structure
  • Key forecast ratios
  • Sourcing and cleaning historic data
  • What makes a good model?

Modelling – integrating financial statements: participants complete a partially-developed financial model for a public quoted company which integrates P&L, balance sheet and cash flow. This company will be the target company used in the merger analysis

Modelling stand-alone valuation

  • Overview of valuation methodologies
  • What do investment banks do?
  • What methodologies could we use?
  • How should we define firm value? Equity vs. enterprise value
  • Calculating free cash flow before financing
  • Understanding and calculating WACC
  • Discussion – calculating WACC
  • Key issues with a two stage DCF valuation – WACC and terminal value assumptions

Modelling – valuation: participants calculate the cost of capital and complete a DCF valuation for the target company, producing a stand-alone valuation as a cross check to the acquisition price

Accounting for corporate transactions

  • Different types of transaction and how they are modeled in practice
  • Consolidation accounting under the current IFRS 3 an IAS 27
  • Change of control triggers
  • Accounting for non-controlling interests (“NCI”)
  • Accounting for disposals
  • Partial disposals – creating a NCI
  • Partial disposal – loss of control
  • Recent changes to acquisition accounting under IFRS
  • Definition of control
  • Calculation of goodwill

Modelling: delegates complete a variety of transaction models incorporating all types of corporate transaction and calculate the effect of a transaction on a set of consolidated accounts in preparation to perform a merger analysis with the target business and an acquirer

Acquisition finance

  • Types of transactions and synergies
  • Availability of synergies and problems in achieving them
  • Methods available for valuing synergies
  • Key differences between public vs. private deals, recommended vs. hostile bids
  • Choices for growth: acquisition vs. organic vs. joint venture
  • Defence strategies for target companies resisting a hostile bid

Case study: Participants calculate synergies for a case company

Structuring acquisition finance

  • Once price has been agreed, how is it paid? Cash vs. Shares
  • Financing choices for raising cash for an acquisition: Debt vs. Equity
  • Calculating the success of a deal, accretion vs value creation
  • The nature of equity instruments
  • The different risks and rewards accruing to different parties
  • The impact of loan stock, convertibles and preference shares on WACC
  • Calculating returns to key participants

Case study: Calculating accretion/dilution and the effect of hybrids on cost of capital

Merger modelling case study

  • Completing a merger model
  • Getting to DCF valuation for the combined business
  • Combined WACC
  • Valuing operating synergies
  • Valuing financing synergies
  • Accretion/dilution analysis vs wealth creation
  • Sense-checking the output and adjusting the capital structure

Modelling – bringing it all together: participants complete a complex merger model for an acquisition of the target business incorporating synergy analysis and varying capital structure. The transaction is analysed on an accretion/dilution analysis and a wealth creation/return on capital analysis

At the end of this session participants will have a working acquisition model incorporating a variety of different forms of transaction analysis

  • Course conclusion: best practice in transaction analysis
  • Participants will have improved their understanding of and have had experience of modelling mergers and acquisitions from first principles
  • Simple and clear reference Excel models – providing participants with a platform for future internal modelling efforts and aiding decision making
  • Participants who, at the end of the course, understand the drivers on transactions and how transactions can be modified to suit the various parties

Days 4 & 5 -Advanced LBO Modelling

Leverage Overview

  • Background to the LBO market
  • Introductory theory – The effect of leverage on firm value

Valuing the target

  • Sourcing information – Historic and forecast data
  • Analysing equity research
    • Key attributes of broker analysis
    • Pluses and minuses of equity research
  • Building a DCF valuation using equity research
  • Modelling the stand alone valuation
    • DCF valuation
    • Use of multiples in valuation (EV/EBIT, EV/EBITDA)

Case Study I: Participants model the stand alone valuation of the target using historic data and equity research

LBO Modelling Overview

  • Key elements of an LBO model
    • Comparing and contrasting DCF and LBO models
    • Sources and uses of funds
    • Key drivers in an LBO model
  • From stand alone valuation to LBO analysis

Case Study II: Participants use the stand alone valuation of the target to complete an LBO model

Assessing debt capacity for LBO financing

  • Financial interdependencies
  • Financing growth
  • Sustainable debt
  • Target debt capacity assumed in a WACC calculation, debt capacity and interest cover Debt capacity in LBOs
  • Debt capacity multiples in practice and credit analysis

Case Study III: Modelling the debt capacity of the target using multiple and credit analysis

Capital providers and their typical characteristics

  • Institutional and management equity
  • Traditional/new lenders
  • Senior tranche profiles
    • A, B, C, RCF
  • Subordinated tranche profiles
    • Second lien
    • Mezzanine (with/without warrants)
    • PIK
    • High yield bonds
  • More complex issues – warrants and options
  • Typical LBO transaction sensitivity analysis, management, base and payout cases

Case Study IV: Modelling a more complex capital structure with various scenarios calculating exit value and IRR for each of the capital providers

Assessing value creation in LBO transactions – APV analysis and dividend recaps

  • Key components of an APV valuation
    • Unlevered value
    • Value of the tax shield
    • Direct and indirect cost of leverage
  • APV valuation and DCF valuation
  • APV valuation in a steady state
  • Calculating AP in a steady growth environment
  • Incorporating APV analysis in an LBO transaction analysis
  • Sustaining returns via a dividend recap

Case Study V: Where has value been created, modelling APV analysis and dividend recap for an LBO transaction

Background of the Trainer:

The trainer is a qualified chartered accountant, who spent several years in corporate finance post qualification. He then spent 18 years in the investment management industry as an analyst/fund manager with Threadneedle Asset Management, a director and head of UK Equities at Scottish Widows Investment Partnership as European, then Global Head of Equity Research at HSBC Asset Management. He ran various types of retail and wholesale funds and produced research on companies in Europe and on a global basis. He developed valuation and research processes and managed teams of European and global analysts and fund managers.

Since leaving the investment management industry the trainer has managed the investment management and investment banking operations of a UK based training company developing programmes for clients as diverse as HSBC, Morgan Stanley, Deutsche Bank, Citigroup, Allen & Overy, JP Morgan, Barclays Bank, Barclays Wealth, Morgan Stanley Investment Management and Schroders. He has managed major graduate programmes for investment banking and investment management clients, training graduate to managing director level participants and advising clients on their training requirements for accountancy, corporate finance and valuation, investment management and private wealth training.

Corporate Finance Modelling Course Summary:

On days one, two and three the course covers the key elements of an acquisition or merger, from the initial stand-alone valuation of the target to the more complex accounting and modelling issues to be considered and finally analysing and assessing the value created by synergy benefits and leverage

This course is run in an interactive, participative format, where participants learn by doing. The key concepts covered in the main teaching sessions are punctuated and illustrated by detailed case and modelling work.

The approach has been designed to equip participants to put key concepts into practical use immediately.

Participants will be led through a comprehensive review of analysis practices, from initial principles through to more advanced techniques that are used in transaction analysis.

As part of their work on this course participants model transactions based on real-life companies and scenarios.

On the last two days participants will cover the key elements of modelling in an LBO analysis. Participants will value the target business using historic data and available equity research. The valuation process will incorporate absolute and relative valuation techniques. Once the target business has been valued, participants will be introduced to LBO analysis and construct an LBO model. The LBO modelling analysis will be developed by assessing the debt capacity of the business to determine the range of capital structures available for the transaction and how credit analysis is used in the LBO modelling process.

The participants will then cover more complex LBO instruments such as warrants and PIKs, how they can be incorporated into an LBO structure and how to calculate returns to each of the equity and debt providers. Participants will model a more complex capital structure and calculate exit values and the IRRs generated by each investor. Using the integrated model participants will then analyse various scenarios (management case, base case, payout case) to derive the optimum financing structure taking into account the financial constraints of each investor.

The participants will then undertake an adjusted present value (“APV”) analysis to determine where value has been created in the LBO transaction using an APV model and finally look at a recovery analysis for a failed LBO transaction.

Case Study: The participants will use a variety of case studies and exercises during the two days, based on publically quoted and generic companies.

Participants will be required to bring a laptop and a calculator to the course.


0/5 (0 Reviews)

5-6 participants – 20% discount,7-8 participants – 25% discount,Over 9 participants – 30% discount


12-16 November 2018, 11-15 February 2019, 24-28 June 2019, 4-8 November 2019