Mergers and Acquisitions from A to Z

by Andrew J. Sherman

Book Overview

Talking mergers and acquisitions for small- to mid-sized companies can sound exciting as the architects behind the deals are wide-eyed with effective growth strategies.

However, these complex transactions carry significant risk, and it is absolutely vital for all involved in the deal to make sure they are guarding themselves against costly mistakes that have been the downfall for many leaders and organizations before them.

Complete...

• Format: Hardcover
• Language: English
• ISBN: 0814413838
• ISBN13: 9780814413838
• Release Date: November 2010
• Publisher: Amacom
• Length: 672 Pages
• Weight: 1.45 lbs.
• Dimensions: 1.2" x 6.3" x 9.2"
• Age Range: 18 years and up
• Grade Range: Postsecondary and higher

Customer Reviews

Useful book - worth the price

This book provides a comprehensive view on the mechanics of mergers & acquisitions. It is worth the money.

Great Intro to M & A concepts

The A to Z of M & A is a great book if you want to know about the M & A process and the various elements involved in it. It is a good starting place to get your bearings right. This book explains in detail what the motivations could be behind a merger and an acquisition. With that key understanding, the book walks us through the next steps, such as developing an Acquisition Plan and the contents therein, Letter of Intent (LOI) and the binding and non-binding terms, preparation of the Work Schedule, etc. Due Diligence is explained in terms of financial/strategic and legal due diligence. Due diligence is a process where confirmation of the initial valuations and assumptions happens but it is also the time to jump ship if the risks or potential liabilities exceed anticipation or comfort level of the buyer. Another critical point is that due diligence happens in phases and is iterative in nature. I liked the emphasis on Fairness Opinions and how the debate around it is growing to keep it `fair'. Regulatory considerations could be general or industry specific. The passage of SOX adds a whole new level to the M & A due diligence and advisory services. Environmental and Federal Securities Laws have become another area for a deep dive. The book distinguishes between horizontal (think competitors) and vertical (think supply chain) acquisitions. It also captures technical details such as the waiting period after the notification has been filed with the FTC and DOJ and that request for an `early termination' will make the transaction public. An acquirer can pay the seller by using any of methods available namely cash, stock, promissory notes, convertible securities, contingent payments or a combination thereof. These are plain vanilla compared to the nontraditional structures and strategies, which are Spin Offs, Leveraged Buy-Outs (LBOs), Consolidation/Roll Ups, and the much emphasized ESOPs. For a spin off to be viewed favorably by IRS, it has to be a deal that will help with access to capital markets, debt-financing prospects, competitive position, management direction, or retention of key employees. The book also introduces the three basic methods of valuation: Comparable Company and Comparable Transaction Analysis, Asset Valuation, and DCF. Within Asset Valuation, the subtle distinction between `Cost of Reproduction' and `Cost of Replacement' is referenced. After the negotiation of purchase price, the team starts to focus on the financing options for the deal. There are three primary issues related to acquisition financing: arriving at the ideal amount of debt to be raised, determining a capital structure with the future success of the company in mind, and the cost of the funds. The sources of financing are the seller and the various types of debt, with collateralized financing not being as popular as it was in earlier years. The importance of communicating the risk mitigation strategies to the loan officer is also emphasized. The variables of

A good place to start

You know you need to know more about Mergers and Acquisitions. The question is where do you start. For many the answer is Mergers & Acquisitions from A to Z. Another book on this subject that is well recieved is: Mergers and Acquisitions Basics : The Key Steps of Acquisitions, Divestitures, and Investments.

Mergers and Acquisitions from A and Z by Sherman

The author explains the distinction between a merger combination and the purchasing of assets in an acquisition by the buyer. Mergers involve considerable restructuring and revaluations as a condition precedent to success. Classic merger difficulties involve indecision, tying in loose ends and optimal timing. Potential sellers seek to build value ; wherein, buyers seek to acquire and nurture value. Acquisitions involve conceptual formulation, action planning, overcoming hurdles and offering memoranda. Due diligence involves an intensive study of the factors driving the deal. These factors involve title, staffing issues, environmental liability, ongoing litigation and "dressing up the financial statements" in anticipation of the sale. Buyer errors involve poor communications, lack of planning, inadequate timing and review of the corporate records of the seller. The acquisition is well worth the price charged for the significant value of the information contained.

Very Straightforward Intro to Small and Mid-Market M & A

This book offers a fairly comprehensive overview of many of the practical details (esp. the legal ones) of M & A in the small to mid-market. The author is a lawyer who obviously has extensive experience in this field and more importantly has the ability to convey his knowledge in clean and concise prose. Of course, this book is not going to be an exciting read, but it is highly recommended for anyone going into this field who wants to develop a framework for understanding how M & A is done. The book focuses like a laser beam on giving the reader a broad introduction. There are few (if any) case studies, but that's actually a good thing because it allows the reader to quickly understand how everything fits together in a M & A transaction. One nice additional feature is a chapter on alternatives to M & A. This book definitely belongs in the business library of any professional involved in M & A transactions.