How to Buy A Business

£625.00 +VAT

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

How to Buy a Business Course Objectives:

Participants will:

  • Be introduced to strategic issues facing a company, including the drivers of growth, the company life cycle, the concepts in acquisitions of risk and return and the product market’s growth and decline
  • Get an overview of growth through acquisition with assessing the alternatives and how to determine whether or not to make the acquisition.
  • Have explained to them the acquisition process, due diligence, the verification process and how to establish the important acquisition criteria
  • Gain an understanding of the structure of the acquisition including key points in the legal agreements, integration, success and failure factors and the importance of the integration team
  • Get to grips with key legal issues in acquisitions such as earn-outs and incentivisation

How to Buy a Business Course Content:

The Drivers of Growth

  • The need to deliver shareholder value
  • The company life cycle
    • The importance of directors recognising the value curve
  • Risk and return
    • Relating risk to the life cycle phase of the company / target
  • Product market growth and decline
    • Evaluating niches, substitutes, value in innovation

REVIEW:  Comparison and contrast of the lifecycle of three different companies, highlighting how success or failure with acquisitions has determined their fate

  • ICI
  • Debenhams
  • GKN

Growth through Acquisition

  • Assessing the alternatives
    • Investment
    • JV
    • Acquisition

DISCUSSION:  Advantages and disadvantages of each approach

  • Determining the acquisition
    • Market objectives
      • Consolidating a fragmented market
      • Building the value proposition
    • Management issues
      • Assessing cultural fit
    • Price parameters
      • Knowledge of comparative deals
    • Opportunity cost
      • Is it a “now or never” deal

REVIEW:  The Ansoff Matrix, a handy way to categorise potential risks in acquisition strategies

  • Pitfalls to avoid
    • Realism of synergies
      • Defining a synergy
      • Identifying the likely presence of a synergy
      • Risks of prediction, cost and achievement
    • Accounting standards
      • Who is the auditor, what principles are followed
      • GAAP versus IFRS
    • Judging forecasts
      • Scepticism rules
  • Commercial factors
    • The target’s history
    • Recurring revenue
    • Intellectual property
    • Customer base

CASE STUDY:  Reviewing company information to arrive at a value, taking into account qualitative and strategic factors 

The Acquisition Process

  • Establishing acquisition criteria
    • Target size and affordability
    • Potential synergies
    • Market / competitor impact
    • Regulatory factors
    • Shareholder impact
  • Deal timetable
    • Selecting candidates and initial approach
    • Negotiation
    • Due diligence
    • Sale and purchase contract
    • Shareholder approval?
    • summary
  • Due Diligence
    • Investigation prior to offer
      • Public sources
      • Private sources
  • Verification
    • Contracts
    • Accounts
    • Pensions
    • Employee disputes
    • Litigation

CASE STUDY:  Reviewing summary information on a company to determine which areas need investigation and who should have responsibility for the task

  • Deal structuring
    • Earn-out / deferred consideration
    • Non-compete undertakings
    • Warranties and indemnities
    • Disclosure letters

Acquisition Integration

  • Success / failure factors
  • The importance of the integration team
  • Earn outs and accounting issues
  • Incentivising key managers
  • Establishing clear reporting lines

Background of the Trainer:

The trainer has over 40 years of City experience, encompassing banking, investment banking, M&A, and corporate finance at Citicorp, early stage investment, and corporate advisory work.  He is a director of several companies and chairman of a fast-growing software company quoted on AIM.

Besides having been a visiting lecturer at the City of London (now Cass) Business School, he has 20 years’ experience of delivering in-house training to leading banks and investment banks in the UK, Europe, Africa, Asia and the USA, and public courses in UK, Europe and Asia covering M&A, company valuation, investment banking, corporate finance and credit analysis.

How to Buy a Business Course Summary:

Creating shareholder value through the pursuit of a successful M + A strategy has been shown to be a far from risk-free activity.   Buyers overpaying or using inappropriate financing methods can lead to destruction of value and in some cases financial distress.

The course covers topics of risk and return, process, investigation and integration as a practical guide to identifying and negotiating acquisitions.

 

What Redcliffe’s clients are saying about the course:
“Gave a broad range of methodologies for valuing a company.”

Senior Business Manager, AIB

 

 

“Explained the basic principles of private equity simply and well.”

Senior Legal Counsel, ING

“Good practical examples and experience of the trainer.”

Director, Ernst & Young

 

“Very interesting course with well covered topics.”

Corporate Finance Executive, Investec

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22 October 2018, 14 January 2019, 8 July 2019, 11 November 2019