May 22-24, 2009, Split, Croatia

Course Description and Objectives

In today's business environment of scarce financial resources, many otherwise solid companies are facing increasing financial difficulties. Corporate restructuring through a merger or acquisition by another company,  a private equity transaction or a leveraged buyout, provide strategic ways to inject the necessary capital, assure survival, and potentially increase profitability. Similarly, companies with ample cash have an excellent opportunity in such environment to capitalize on weaknesses of many market players. This course, taught by the Head of the Finance Department of the Wharton School, the leading finance department in the world, will teach you how best use corporate restructuring to improve the shareholder value.

This course focuses on financial tools, techniques and best practices used in buyouts (financial buyers) and acquisitions (strategic buyers). We will explore how different buyers approach the process of finding, evaluating and analyzing opportunities in the corporate-control market, how they structure deals and now deal structure affects both value creation and value division, how they add value after transaction completion and how they realize their ultimate objectives (such as enhanced market position or a profitable exit).

 The course divided in two broad modules. The first module covers buyouts by private equity partnerships and the second one studies mergers and acquisitions. Both modules will be taught through a mix of lectures and cases, in order to stimulate interactive participation in the discussion of relevant issues.

 

Expected Outcomes

At the end of the course you should be able to:

• Get insight on how to use restructuring as a strategic tool in today's business environment
• Learn to make decisions regarding mergers and aquisition deals from a buyer and a seller perspective
• Master the principles of managing private equity investments and various techniques of private equity financing
• Develop the optimal financing structure for private equity transactions,
• Forecast a pro-forma balance sheet by using the most appropriate sources of debt and equity finance
• Analyze the terms of a buyout deal in a knowledgeable way and to understand the value implications of an LBO as well as the incentives and motivations of its major participants.

Who Should Participate

• Senior executives
• Finance directors of corporations
• Commercial and Investment bankers
• Management consultants
• M&A specialists
• Auditors
• Equity analysts
• Fund managers
• Prospective investors

Course Outline

Day 1

• Three alternative approaches to equity valuation
• Arriving at a discount rate
• Obtaining cash flows from financial statements
• Case: Harris Sea Foods.
• Mergers and aquisitions
• Private equity and leveraged buyouts (LBOs)

Day 2

• Guest speaker discussion on strategic implications of the current financial crisis on corporate restructuring
• Analysis of the RJR Nabisco, Inc. buyout performed by Kohlberg Kravis Roberts & Co. in 1988 which is considered to be the second largest leveraged buyout in history, adjusted for inflation
• Analysis of the Seagate Technology Inc. by an investment group composed of Seagate management, Silver Lake Partners and Texas Pacific Group in a 3-way merger-spinoff with Veritas Software

Day 3

• Review of the auction setup for selling Carter's and a survey on the strategy designed by the Berkshire Partners' LBO team during Carter's acquisition
• Analysis of the Brazos Partners' strategy for acquisition of CoMark Bulding Systems in the light of development of the U.S. LBO industry during late 1990s
• A lecture by Dr. Ivan Vrdoljak: a case study based on Croatian/regonal experience