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Business Valuation Courses

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The specialist in highly technical, market-driven valuation training

Valuation Courses

web: redliffetraining.co.uk email: [email protected] phone: +44 (0)20 7387 4484

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Advanced Negotiation Issues in M&ADate:

Location: London Price: .....+VAT

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PUBLIC COURSES

Bank Valuation Real Estate Modelling The Advanced LBO Modelling Course The Corporate Finance Modelling Masterclass The M&A Course The Modelling for M&A Course Valuing a Business Valuing Start Up and Pre IPO Companies Valuing a Pharmaceutical Company Valuing a Technology Company

IN-HOUSE COURSES

Advanced Business Valuation and Modelling Training Advanced M&A Modelling: A Practical 3 Day Workshop Advanced Valuation - Valuing Rapid Growth Companies Applied Financial Mathematics in Excel Training Course Emerging Market Bank Modelling & Valuation Excel Auditing Workshop Lease Modelling in Excel Modelling Service-Based Businesses VBA and Macros Valuation Masterclass - Valuing Difficult Businesses

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IN-HOUSE COURSES

Valuing Commodity Companies and Sectors Valuing Cyclical Companies and Sectors - Advanced Valuing Declining and Distressed Companies - Advanced Valuing Early Stage and Start Up Companies - Advanced Valuing Financial Companies Valuing Emerging Market Companies

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bookings irrespective of the numbers booked.

You Corporate Membership Scheme can be used once payment is received and will be valid for one year.

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Bank ValuationDate: 18-19 June 2018, 25-26 Oct 2018

Location: London Standard Price: 1,300 + VATMembership Price: 1,040 + VAT

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Course Objectives

This training allows participants to build a structured approach to the analysis and valuation of banks. Specifically, through a mix of lecture, case studies and Excel modelling of Barclays, the workshop will equip participants to:

Review the accounting and valuation of banks financial statements including the loan book, financial instruments and deriva-tives used for hedging purposes;

Further advance participants understanding of the latest Basel III developments including MREL, counterparty credit risk and the latest leverage and liquidity ratios (LCR and NSFR);

Understanding the key metrics to value a bank, including performing all the steps of a Dividend Discount Model (DDM) and Multiples Analysis using Excel.

Course Overview

Day 1

Session 1

The aim of this session is to provide participants with an understanding of the financial statements of a bank. The focus is on the banking book and financial instruments. The reporting and valuation of derivatives is also discussed. Banks financial statements overview Accounting for loans

Non-performing loans Understanding impairments vs. write-off Incurred losses (IAS 39) has been re-

placed by expected losses (IFRS 9) Accounting for financial instruments

Lastest IFRS 9 implications: Amortised cost, FVTPL and FVTOCI

Level 1, 2 and 3 valuations Impairments of financial instruments

Accounting for derivatives Hedge accounting: fair value, cash flow

and net investment Netting derivative assets and liabilities

Case study: Barclays Financial Statements

Session 2 Fundamentals of Regulatory Capital Throughout this module, participants review the current regulatory requirements, in particular Tier I and Tier II capital ratios and understand detailed computations. Overview of regulatory framework Overview of Basel I, II and III and latest

Basel IV updates Overview of calculating available and re-

quired capital Common Equity Tier 1 (CET1), Tier 1,

Tier 2 and Total capital

Key reconciliation items from IFRS Book Equity to CET1: minority interests, deferred tax, changes to investment portfolio, etc.

Overview of calculating risk weighted assets (RWAs): credit risk RWA, counterparty risk, market risk and operating risk with the latest Basel IV requirements

- Standardised floor of 72.5% based on standardized approach - Simultaneous reduction in standardised risk weights for low risk mortgage loans Overview of key capital, liquidity and funding

ratios Tier 1 and total capital ratios Leverage ratios Liquidity coverage ratios (LCR) and Net

stable funding ratios (NSFR)

Case study: Barclays Regulatory Ratios Review

Day Two Session 3 Forecasting and Modelling Banks Based on the financial statements and publicly available regulatory information of Barclays, participants forecast its financial performance based on its historical statements. Modelling and forecasting the balance sheet:

deposit or loan-driven? The loan and trading book Funing requirements and mix: deposit vs.

wholesale funding Growth in funds under management Modelling and forecasting the income state-

ment

This training allows participants to build a structured approach to the analysis and valuation of banks. Specifically, through a mix of lecture, case studies and Excel modelling of Barclays, the workshop will equip participants to: Review the accounting and valuation of banks financial statements including the loan book,

financial instruments and derivatives used for hedging purposes; Further advance participants understanding of the latest Basel III developments including

MREL, counterparty credit risk and the latest leverage and liquidity ratios (LCR and NSFR); Understanding the key metrics to value a bank, including performing all the steps of a Dividend

Discount Model (DDM) and Multiples Analysis using Excel.

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Bank ValuationContinued

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Understanding the income statement drivers Net interest income and margin Non-interest income Forecasting loan impairment through the

credit cycle Operating costs Tax Modelling and forecasting regulatory capital Risk weighted assets Required and available capital under Basel I,

II or III Liquidity requirements and stable funding

requirements Forecasting dividends (payout ratio and/or

minimum capital requirement) Ratio analysis and key performance ratios

Case study: Financial Modelling of Barclays on Excel

Session 4 Bank Valuation Following the forecasting of the banks performance, this session focuses on the Dividend Discount Model (DDM) and key multiples of Barclays. Free cash flow to equity mode Present value of future dividends Cost of equity for banks Terminal value: review of potential ap-

proaches (key parameters or RoE) Sensitivity analysis Banking trading multiple

P/BV and adjustment to BV explained P/E, dividend yield

Case study: DDM and Multiples of Barclays on Excel

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Real Estate ModellingDate: 13-15 Mar 2018, 28-30 Nov 2018


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Course Overview

Course Methodology

This course will teach you all the available techniques and how to practically apply them through the use of Excel, Estatemaster and Argus. An extensive use of case studies will be adopted to illustrate the principles covered. Ultimately delegates will get practical tips on layout and style in building and analysing user-friendly models which are available as additional benefits of the course.

Who Should Attend

This course is designed for delegates who are seeking to improve their technical real estate modelling skills in Excel.

Bankers and financiers involved in real estate Directors and business development executives from corporates, equity sponsors and consultan-

cies

Day 1: Building Blocks of Real Estate Modelling

Using Excel for modelling Worksheet organization Data input, management and verification Use of colour/add-ins Naming of cells Location of input variables Review of Excel functions and their use Macros and their use Goal seeking Optimisation Circularity and how to resolve it Working with range names Graphs and charts What is needed from Excel and what is

superfluous Principles of spreadsheets and workbooks

Case Study: Evaluating good and bad Excel financial models

Equity valuation Equity NPV/ IRR and project IRR XNPV, XIRR, MIRR Modelling cash flow and ratios: Allowing for accountancy in real estate

models: Depreciation Tax SPV accounting Capital allowances

Case Study: Valuation and Cash Flow models

Fundamentals of Real Estate Models Objectives of real estate models Structure of real estate model design Dealing with escalation/inflation Monthly, quarterly and annual modelling Design, testing and feedback Model sensitivity and auditing Revenue and cost modelling Cash adequacy, recourse, standby and li-

quidity Financial coverage ratios and the bank per-

spective What are the software choices for real estate

development? Estatemaster vs Argus vs Excel

Demonstrations: Argus and Estatemaster

Real Estate development modelling issues Architects, planners and real estate develop-

ment Concept and objectives of Construct and

Sell (CS) models Assumptions required for CS models Development cashflow corkscrews Sales prices and taxes Valuation and risk analysis of real estate

development modelsCase Study: Examples of real estate development models

Real Estate investment modelling issues Limited recourse and loan terms and cove-

nants in real estate lending Structuring and financing solutions

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Real Estate ModellingContinued

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Real estate investment finance experience worldwide

Objectives of real estate investment models Buy and Let (BL) discounted cash flow

modelling issues Risk analysis for real estate investment

models

Case Study: Review of several real estate investment models and their decision-making input

Day 2: Building a Construct and Sell (CS) Model

Building a real estate model. Based on a real example, provided by an equity investor in a real estate transaction, delegates will construct and use a model for the transaction. The exercise will include:

Project Review Analysing the inputs Costing construction Dealing with input priorities Data plausibility Modelling loan drawdown Sales price projections and cap rates Establishing value from a construct and sale

transaction

Day 3: Building a Discounted Cash Flow Model (DCF) model

Delegates will continue with the real example from Day 2 to construct a model based on the assumptions of construction, with revised assumptions, and leasing out. Revising construction inputs Loan assessment criteria PGI, EGI and NOI in the model Forecasting NOI and operating expenses Modelling loan amortization IRR NPV and other valuation analysis

Monte Carlo and real estate modelling Methods of handling risk What is Monte Carlo analysis? Worked examples of Monte Carlo analysis Applying Crystal Ball to CS and CL Models Analysing the results Presentation of Monte Carlo results to senior

management

Course Conclusion

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Advanced LBO Modelling - A Practical WorkshopDate: 08-09 Feb 2018, 28-29 Jun 2018, 15-16 Nov 2018

Location: London Standard Price: 1,300 +VATMembership Price: 1,040 + VAT

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Course Overview

This course covers 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.

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 re-search

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

From stand alone valuation to LBO analy-sis

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

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Advanced LBO Modelling - A Practical WorkshopContinued

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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

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 environ-

ment Incorporating APV analysis in an LBO trans-

action analysis

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

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Corporate Finance Modelling MasterclassDate: 5-9 Feb 2018, 25-29 Jun 2018, 12-16 Nov 2018


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Course Overview

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.

Course Content

Days 1, 2 & 3M&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

Day Two Accounting for corporate transactions Different types of transaction and how they

are modelled in practice

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Corporate Finance Modelling MasterclassContinued

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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 bidCase study: Participants calculate synergies for a case company

Day Three

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 structureModelling 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 un-

derstanding 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 & 5Leverage 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 re-search

Modelling the stand alone valuation



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Corporate Finance Modelling MasterclassContinued

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Course Content

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 analy-sis

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 analysisCase 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 op-tions

Typical LBO transaction sensitivity analy-sis, 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 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 environ-

ment Incorporating APV analysis in an LBO trans-

action analysisCase Study V: Where has value been created, modelling APV analysis for an LBO transaction



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Mergers & Acquisitions (M&A) CourseDate: 15-18 May 2018, 22-25 Oct 2018


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Course Overview

This four day M&A course covers all aspects of buying, selling, valuing private companies and management buy-outs.

The first day of this mergers & acquisitions course covers 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 second day of this mergers & acquisitions course covers the topics of the financial ratios used in comparable company valuation, creative accounting, the cost of capital, forecasting and discounting free cash flow. Exercises include the use of an Excel spreadsheet as input to valuing a business and, accordingly, attendees are requested to bring a laptop to the course.

The third day of this mergers & acquisitions course covers the practical steps that are required to plan, negotiate, and close a successful sale. Valuing the business to be sold and the effective presentation of the commercial attractions of the business are key elements, as are choosing the appropriate advisers and running a competitive auction.

The fourth day of this mergers & acquisitions course covers the principles and practicalities involved in arranging and negotiating a management buyout. In addition to the legal issues to be addressed, the use of bank debt and other financial instruments is examined in the context of developing a

Day 1: The Drivers of Growth

The Drivers of Growth 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

DISCUSION: 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

Risks of prediction, cost and achievement Accounting standards

Who is the auditor, what principles are followed

Judging forecasts Scepticism rules

Commercial factors Targets history Recurring revenue Intellectual property

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Mergers & Acquisitions (M&A) CourseContinued

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Course Content

Customer list

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

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

Structuring the deal 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

tax considerations

Day 2:Overview of the Process Motives and objectives of the vendor Which outcome is preferred

Cash only sale with honour Management buyout IPO

Timescale

Preparing the Company for sale

optimising the operations removing skeletons, resolving related par-

ty conflicts resolving accounting / audit issues

tightening up provisions, write offs, stock obsolescence

clearing legal points employee issues customer / supplier disputes

choosing advisers tax considerations

the vendors position company PAYE, corporation tax

Quiz: What are the top ten objective of a vendor Assessing the value of the business Other factors

IPR Market share Customer base Niche products Strategic value to a buyer

Exercise: Calculating the value of a business using different metrics

Initiating the Process Choosing advisers

Investment bank Merger brokers Accountants Other

Agreeing the mandate Fees

Retainer, success, no go Exclusions

Companies and territories Time limits Indemnities

Preparing key documents Information memorandum Support material

Confidentiality undertakings, product information

Due diligence pack Reasons for, use of vital data rooms

Management preparation Confidentiality Conflicts of interest The sale team Presentation material

The Sale Process



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The cost / risk / timescale issues in A trade sale Buyout IPO

Trade sale approaches Public auction Private auction Bilateral negotiation

Organising an auction Identifying the purchasers

Tiering prospects into probables, possi-bles, maybe

Defining the deadlines The importance of realism

Contact and confidentiality Dealing with large company buyers

Judging the offers Will a no price offer work?

Conducting the second stage discussions Company and management visits

Preferred bidder and exclusivity How long for exclusivity?

CASE STUDY: Reviewing an information memorandum on a company sale to assess: the value of the business, the most likely buyers

Sealing the deal Earn-outs

Bridging the valuation gap Warranties, disclosure letter

Buyer / vendor conflict Time limits, caps Completion accounts Comfort letters

Alternative outcomes IPO, timescale MBO, management conflicts Post exit lock-in Ongoing relationship

Day 3: Valuation Principles Value to whom? Price and intrinsic value The risk / return trade off Strategic risk

The Accounting Approach Accounting measures of performance and

value Problems of the accounting approach Are profits relevant? GAAP vs IFRS Creative accounting

How to find it Recent examples

Review: Was the near collapse of Quindell inevitable?

Accounting Valuation Metrics Asset and net asset valuations Dividend-based models

Dividend yield Dividend discounting

Application and drawbacks of dividend mod-els

Earnings-based Price / earnings ratios P/E strengths and weaknesses PEG ratios Enterprise value

Exercise: Valuation of a business using different metrics

Comparable Company Valuation Issues Is the comparability achievable?

Accounting principles Averages, medians, outlines Listed vs private

Sustainability of earnings Business model flexibility

Exercise: Project Oxford, using comparable company techniques to value a company for acquisition

Calculating the Cost of Capital Assessing the cost of debt Calculating the cost of equity

The risk free rate Equity premium Beta

The weighted average cost of capital The flaws in the capital asset pricing model Alternative approaches

Exercise: Calculating the cost of equity and the weighted average cost of capital

The Cash Flow Approach to Valuation The time value of money Calculating the discount rate Forecasting free cash flow

Calculating FCF Identifying value drivers

Terminal value

Exercise: Discounting free cash flow to arrive at a value per share



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Exercise: Project Media. Using an Excel spreadsheet and given assumptions to arrive at a value of a company that is an acquisition target.

Project Media II. Varying inputs, in particular the debt / equity mix of the acquisition financing, to consider the maximum price that could be paid for the target

Day 4: The Growth of Private Equity and Leveraged Buyouts Academic rationale for the use of leverage

Modigliani/Miller theory Michael Milkens research Growth of shareholder activism

Reviving under performers Changes in company law The development of the European high

yield bond and securitisation markets

The Principles of Leveraged Finance The use of debt to drive equity values

Cash flow management Reducing debt to drive equity value

Operational improvements Building need to have

Incentivisation of management Getting rich together

Cash-capture clauses

Exercise: Good or Bad LBO?

Discussion of recent transactions to see which ones the attendees would do, and what lessons can be learned about elements of success or failure

Structuring the transaction Target IRR

Assessing the return appropriate to the risk

Assessing debt capacity Forecasting future cash generation

Senior / mezzanine debt mix Judging asset values

Forecasting exit values Consideration of non-bank finance

High-yield bonds Terms and size of issue

Second lien debt > Too much debt?

PIK finance

Saint or sinner? Vendor loan notes

Making the deal look good

Case Study: Based on information provided attendees are tasked with structuring the finance for an MBO. Answers are discussed to identify the critical elements in the financing

Legal elements Warranties and indemnities

Investor protection New Memo & Arts

Incorporating P.E. control elements Tag along and drag along

Control of the exit Veto rights for private equity

Control of management Management

Jensen and Meckling agency theory Why buyouts work

The envy ratio Management incentivisation

Agreeing the ratchet Carrot and stick

Good leaver / bad leaver provisions Covering under performance

Exercise: Agreeing the terms of the envy ratio

Identifying and Closing a Good Transaction Ideal company characteristics

The three golden rules MBO / MBI

Assessing management strength Meeting vendors expectations

Structuring the deal Avoiding conflicts of interest

Recognising the risks of multi-layered financing

Due diligence Investigation and verification

Tie-in with contract terms Structuring the debt appropriate to the busi-

ness

Discussion: How to finance the acquisition of Manchester United. The Man U accounts are reviewed with the object of deciding how to finance its acquisition. Answers are compared to the actual result.

Exit Control by P.E. house



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Course Content

The Modelling For Mergers & AcquisitionsA Practical 3-Day Workshop

Date: 05-07 Feb 2018, 25-27 Jun 2018, 12-14 Nov 2018Location: London Standard Price: 1,800 +VAT

Membership: 1,440 + VAT BOOK NOW

Course Overview

This 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.

By the end of this course participants will understand: Drivers on M&A How to model integrated financial statements How to use financial statements to value a business How to model the balance sheet impact of transactions How to incorporate synergies into modelling work How to differentiate between financing and operating synergies How acquisitions can be structured

Much of the course work involves Excel modelling and analysis, equipping participants with the tools to analyse leveraged acquisitions: Building up from partially-complete models Working with integrated financial statements Developing the acquisition structure and modelling instruments Running scenarios, iterating and optimising

Each participant should bring a laptop with USB port to the course to facilitate modelling work.

Day 1

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 v.s. en-

terprise 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 Day 2

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The Modelling For Mergers & Acquisitions A Practical 3-Day Workshop

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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

Day 3Structuring 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 capita

Merger modelling case study Completing a merger model

Getting to DCF valuation for the combined busi-ness

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 understand-

ing of and have had experience of modelling mergers and acquisitions from first principles

Simple and clear reference Excel models - provid-ing participants with a platform for future internal modelling efforts and aiding decision making

Participants who, at the end of the course, under-stand the drivers on transactions and how trans-actions can be modified to suit the various parties

What our clients are saying about the course

Methodical and clear. Liked how it went through whole process of linking up

financial statements

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Course Content

Valuing A BusinessDate: 17 May 2018, 24 Oct 2018

Location: London Standard Price: 625+VATMembership Price: 500 +VAT

Course Overview

Valuation of a business, whether in the context of investment or M&A, is central to the negotiation of a transaction. Methods of valuation vary and a fundamental difference exists between the accounting and cash-based approaches.

The course covers the topics of the financial ratios used in comparable company valuation, creative accounting, the cost of capital, forecasting and discounting free cash flow. Exercises include the use of an Excel spreadsheet as input to valuing a business and, accordingly, attendees are requested to bring a laptop to the course.

Valuation Principles Value to whom? Price and intrinsic value The risk / return trade off Strategic risk

The Accounting Approach Accounting measures of performance and

value Problems of the accounting approach Are profits relevant? GAAP vs IFRS Creative accounting How to find it Recent examples

Review: Was the near collapse of Quindell inevitable?

Accounting Valuation Metrics Asset and net asset valuations Dividend-based models Dividend yield Dividend discounting Application and drawbacks of dividend

models Earnings-based Price / earnings ratios P/E strengths and weaknesses PEG ratios Enterprise value

Exercise: Valuation of a business using different metrics Comparable Company Valuation Issues Is the comparability achievable? Accounting principles Averages, medians, outlines Listed vs private Sustainability of earnings Business model flexibility

Exercise: Project Oxford, using comparable company techniques to value a company for acquisition

Calculating the Cost of Capital Assessing the cost of debt Calculating the cost of equity The risk free rate Equity premium Beta The weighted average cost of capital The flaws in the capital asset pricing model Alternative approaches

Exercise: Calculating the cost of equity and the weighted average cost of capital

The Cash Flow Approach to Valuation The time value of money Calculating the discount rate Forecasting free cash flow Calculating FCF Identifying value drivers Terminal value

Exercise: Discounting free cash flow to arrive at a value per share

Exercise: Project Media. Using an Excel spreadsheet and given assumptions to arrive at a value of a company that is an acquisition target

Project Media II. Varying inputs, in particular the debt / equity mix of the acquisition financing, to consider the maximum price that could be paid for the target

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Valuing Start Up And Pre IPO CompaniesDate: 22-23 Mar 2018, 7-8 Nov 2018

Location: London Standard Price: 1,350+ VAT Membership Price: 1,080 +VAT

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Course Overview

This advanced valuation and modelling course looks at the valuation approaches to be taken to enable participants to value companies which may be at differing stages of development and growth profiles. Traditional valuation techniques assume a simple two or three stage growth profile and a terminal value or basic multiple based valuation tools. This course looks at some of the more difficult companies to value based on the underlying fundamentals of the development stage at which the company operates.

The course covers companies at the early growth and start up stage, such as technology, biotechnology and any early funding stage business. The key challenges associated with such companies are discussed and the best valuation approach considered.

The course also covers pre IPO companies at the rapidly growing phase of development which, depending on the geographic location, may cover a wide variety of sectors. As well as discussing some of the current issues with traditional cash flow and multiple based valuation approaches the course will cover more advanced valuation approaches such as decisions trees, simulations, scenario analysis and real option valuation. The course will also consider the role of risk assessment in the valuation process and how macro-economic analysis can affect the valuation approach taken. Examples are provided to illustrate each issue. Participants will be required to bring a laptop to the course.

Overview of valuation approaches Intrinsic valuation traditional cash flow

techniques Relative valuation multiple based analysis Probabilistic valuation scenario analysis,

decision trees and simulations Real options valuation additional value

created through optionality Other valuation issues Assessing risk the risky risk free rate and

other current valuation issues The economic cycle incorporating mac-

ro-economic factors into a valuation

Valuing early stage and start-up companies and sectors A life cycle view of start-up companies

Start-up companies in context Characteristics of young companies and

sectors The key challenges with start-up compa-

nies Visibility a key valuation challenge

Valuation issues intrinsic value How to value existing assets in a start-up Cash burn and the effect on existing as-

sets The future of the business high growth

& growth phases Assessing growth rates - the key compo-

nent of value Adjusting risk for small fast growing busi-

nesses Discount rates for pure equity financed

businesses When to calculate terminal value Reducing the dependence on terminal

value Value of equity claims

Assessing equity claims in a early stage business

Valuation issues relative valuation Problems with start-up multiple analysis Determining the starting point revenue

multiples vs profitability multiples Which year? Determining stability for

multiple calculation and techniques for normalising multiples vs the sector

Valuing a start-up or early stage business in practice Main errors made in valuing early stage busi-

nesses Macro vs micro analysis Product success and market share Bottom up approach to a valuation

Capacity capability Estimating and using different discount

rates The use of phased discount rates

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Discount rates as maturity approaches Ensuring consistency in a valuation Private and public multiples Option to expand valuation

How optionality affects valuation

Valuing pre IPO companies A life cycle view of pre IPO rapid growth

companies The rapid growth company in context

Characteristics of growth companies and sectors How are growth companies different?

Valuation issues intrinsic value How historic numbers are misleading How asset life may develop in the high

growth phase How existing assets differ in a rapid

growth business Where the bulk of value is created by

a rapid growth company the growth phase

Capital intensity and the rapid growth business

The development of risk during the growth phase

The stage at which a terminal value should be calculated for a rapid growth business the path to IPO

Value of equity claims The differing equity claims in a rapid

growth business Participation by different equity holders

Valuation issues relative valuationPeer groups private vs public companies Finding similar growth businesses differ-

ent sectors? Risk measures adapting a multiple analy-

sis for risk Valuing a growth business in practice

Main errors made in valuing growth busi-nesses

Dealing with immature markets Assessing product cycles Ability to execute the key driver

Valuing the operating assets through the growth phase How operating asset lives develop in the

high growth phase Ensuring consistency in a valuation Reinvestment and growth Assessing investment requirements the

returns and reinvestment equation Completing the valuation combining re-

turns and risk in a model

Valuing Start Up And Pre IPO Companies

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Valuing a Pharmaceutical CompanyDate: 27 Feb 2018, 13 Nov 2018

Location: London Standard Price: 695 +VAT Membership Price: 556 + VAT

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Course Overview

If the business model of the modern pharmaceutical industry did not already exist, management consultants and business schools would surely have invented it as a fictional basis for exploring the challenges posed by a perfect storm of every conceivable risk and uncertainty.

It is perhaps doubtful whether investors, managers and analysts would have believed that any business model embodying such a perfect storm would be sustainable and therefore worth studying at all were it not for the fact that in the pharmaceutical industry, real life really is stranger than fiction.

Nowhere are all the risks and uncertainties confronting the pharmaceutical industry more clearly or comprehensively exposed to view than in the process of valuation.

This one-day intensive workshop begins with an in-depth analysis of the pharma business model itself, and then explores in detail the theoretical and practical barriers to the application of the most widely employed valuation metrics and methods.

It locates common pitfalls, and shows how a judicious selection of horses for courses can help us to establish at least a conditional range for possible valuations in different contexts.

The course is intensive rather than advanced, in the sense that it is strongly interactive in tone and structure (Excel-based exercises figure prominently, especially in the second half), yet it assumes no more than a basic understanding of financial statements and of a few of the most widely used measures of financial performance and condition, such as return on capital and p/e ratio.

As the participants are being asked to unlearn much of their previously unchallenged conventional wisdom, those who come to the table with less inherited baggage might even have an advantage!

Review of the pharma business model, with copious illustrations Long, unpredictable and variable life-cycles of

individual products, from discovery, through pre-clinical and clinical development, to launch and eventual patent expiry

Low correlation in timing and amount of costs and revenues

Imperfect diversification of product portfolios (in terms of product numbers, sizes, types, and stag-es in life-cycle)

Exposure to a wide range of long-term uncon-trollable factors demographic, epidemiological, scientific (looking for needles in haystacks), political, geopolitical and economic

Uncomfortably close and unusually complex relationship with government (healthcare policy and priorities, regulation, pricing regime, overall demand)

High risk of unforeseen technical failure, and costly and protracted lawsuits

Little freedom to plan for long term, in face of constant threat from opportunistic predators

Overview of conventional models: their general strengths and weaknesses, when they work best and when they work least well Primary models

NPV based on Free Cash Flow (FCF) Comparables and benchmarking Book-based models Market multiples

Secondary refinements Sensitivity and scenario analysis Decision tree analysis and real options Monte Carlo analysis

How conventional valuation models are challenged by the pharma model, as for instance: Data samples and populations (e.g. on overall

amounts and timings of costs and revenues) too small, heterogeneous and idiosyncratically distrib-uted to be statistically useful

Conventional measures of mean and dispersion inoperable

Genuine comparability, between companies, be-tween deals, and between therapies, unduly elusive in practice

Conventional modelling techniques unable to ac-

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Valuing a Pharmaceutical Company

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commodate shifting levels of risk through the product life-cycle: inapplicability of standard CAPM and dividend-based model of expected returns

Lack of informed market consensus on criteria for analysis

Chronic tendency towards optimism in manage-ment commentary, e.g. on value of pipeline, stage of development, timing of launch and subsequent success in market

Shortcomings of the accounting regime in: capturing relevant costs and accommo-

dating mismatch in timing of costs and revenues

reaching consensus on intangible assets resolving problems of business combi-

nations Finding a way forward General principle: do as much work as possible

before confining ones brain in the fixed con-fines of an Excel spreadsheet!

Strategic analysis of the relative strengths and weaknesses of the business to be valued and of the sector(s) in which it operates, using a standard framework such as Porters Five Forc-es

Bottom-up approach: refining institutional FCF into product-specific FCFs, using Bottom-up estimates of revenue and costs

based on demographic, epidemiological and other factors:

Product-specific rNPVs (risk-adjusted NPVs), instead of entity-wide NPV, with individual discount factors calibrated according to (i) costs, (ii) revenues and (iii) risks appropri-ate to individual major product characteris-tics at each stage of its life-cycle

Top-down approach: sense-checking the dif-ference between (a) market EV and (b) sum of the product rNPVs from the bottom-up ap-proach, by seeking possible reasons for positive differences (e.g. pipeline, well-

struck balance between diversification and internal synergy, bargaining power in M&A market)

negative difference (e.g. accident-prone management, above-average vulnerability to competitors, predators and government)

Bringing it all together 1: Working with Excel

Basic tips and tricks for constructing an Excel-based valuation that is at once comprehensive, coherent, consistent and flexible

The template must be appropriate to the case, facilitating comparison with comparable cases and highlighting differences with contrasting cases

Line and column descriptions must indicate re-lationship between values: Go and look at the formulae is no way to treat grown-up readers

Assumptions (and variations of assumptions) must be highlighted

Sources and relative reliability of different data inputs must be highlighted

Top-level results must be summarised on front sheet, and indicate not only a point value but a range of values, as well as an indication of the principle parameters for the range

Bringing it all together 2: Constructing a pharma valuation

Participants will work in small groups on a comprehensive valuation exercise under the close supervision of the trainer, who will help resolve individual problems while acting as a channel for sharing each groups insights and experiences with the class as a whole.

The workshop concludes with presentations by one or more of the groups to the class as a whole, in an exercise designed not only to give them self-confidence in their technical skills but also to enhance their ability to communicate their findings to colleagues.


Course material were interactive and independent

Interesting practical insight, discussions and examples

Case study very relevant

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Valuing A Technology CompanyDate: 26 Feb 2018, 12 Nov 2018

Location: London Standard Price: 695 + VATMembership Price: 556 + VAT

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Course Overview

This course is ideal for those who are dealing with technology companies and need to gain an appreciation of their worth.

It focuses on the different techniques that can be deployed in assessing these companies, especially the real options approach which has achieved a wide degree of popularity. The course is also useful to those who are involved in any type of corporate transaction for technology companies from an advisory perspective.

Participants should be familiar with discounted cashflow techniques and have at least a basic understanding of business valuations.

Participants will be required to bring a laptop with a CD-Rom or USB connection to the course.

Defining the Problems Differences between traditional corporate

valuation and technology valuation

Handling data problems that emerge with technology companies

Lifecycles and corporate cashflows Review of DCF valuation techniques and

applications to technology businesses

Valuing early stage development businesses

Applying the DCF Model to Technology Companies Estimating cashflows and expenditure pat-

terns Evaluating the expected growth rate Links to corporate strategic models Combining growth rate with investment

intensity and return on investment

Applying the appropriate discount rate and varying the rate over time

Evaluating the stable growth stage and cal-culating the terminal value

Inherent problems of using the DCF model to value technology companies

Using Multiples in Technology Valuation Importance of using EBITDA if possible, Us-

ing revenue multiples Examining the broad range of possible com-

parisons Using statistical analysis to improve the

multiple comparison Pitfalls in using multiple approach for technol-

ogy companies

Using the Real Options Approach The problems inherent in using the NPV/DCF

approach to valuation

Defining real options patent rights, expan-sion option, abandonment option

Why real options are more applicable to tech-nology companies

Basics of real option valuation using binomial trees and a lattice approach

Financial option pricing (Black Scholes) and the link to real options

Management options and the value of strategic flexibility

Using real options approach to improve the un-derstanding of technology valuations


Covers price vs value

A proactive course - helped challenge traditional methods & point out common

errorsGood discussions regarding the implications

of difference techniques

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Advanced Business Valuation and Modelling

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Course Overview

This advanced valuation and modelling course builds on basic concepts by developing DCF techniques and taking a fundamental approach to multiple analysis.

Financial forecasting techniques are developed to incorporate more complex forecasting issues including provisions, off balance sheet finance, JV/associates, minorities, tax losses/deferred tax, and stock options.

More advanced analysis techniques are then used to develop a basic DCF approach including APV and EVA analysis, cost of capital for hybrid instruments and calculating a cost of capital for emerging market stocks. Each are explained in relation to the calculation of capital and return and the impact on modelling cash flows from a company.

Examples are provided to illustrate each issue.

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

The Value Driver Approach to DCF What return is implied by a two stage DCF

model? Developing DCF techniques to cope with

growth and fade Importance of ROCE and key drivers Three stage DCF models with fade, why this

will produce a more accurate valuation Fundamental Multiples Formulas for fundamental multiples Identifying key drivers of the following mul-

tiples: EV/EBITDA: ROCE is key EV/Sales: is margin important? PEG: misleading numbers? Price/Book: good or bad predictor of val-

ue? Price/sales: when is it useful? Valuation matrix

Developing the cost of capital WACC revisited Leveraged and re-leveraged betas Dealing with hybrids:

Calculating equity and debt components The approach to hybrid betas Calculating the cost of a hybrid

Dealing with cost of capital in emerging mar-kets Calculating the equity risk premium What is the cost of debt? Default rate and relative standard devia-

tion approach

Further DCF analysis APV analysis how much value is created by

leverage? EVA analysis how much value is created in

the future? Comparison with DCF and conditions for equiva-

lence with DCF

Modelling Course Content:

Modelling more complex DCF analysis Explicit forecast period issues Terminal value issues How adjustments affect valuation Adjusting the cost of capital for hybrids Adjusting the cost of capital in emerging mar-

kets

Modelling APV and EVA APV under static and constant growth APV and DCF equivalence required conditions Modelling EVA valuation EVA and DCF equivalence required conditions

Modelling extras dealing with Tax losses and deferred tax Stock options - expenses & dilution JV/Associates: cost or valuation? Dividends Minorities forthcoming changes to Non-Con-

trolling Interest Provisions

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Advanced M&A ModellingIn-House

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Course Overview

This course follows on from the M&A modelling course and develops some of the principles previously covered but moves beyond simple synergy analysis to analyse other options available to an acquirer to extract maximum value post acquisition.

The course looks at more complex M&A transactions post acquisition including different types of disposals, asset sales, carve outs or trade sale/IPO and the process used to determine whether a disposal will enhance the value of an acquired business. Sometimes these disposals will be voluntary and sometimes forced through competition issues.

In each case the participants model the impact of the various types of transaction on a case company and assess the most appropriate transaction for the business. The course then examines the various issues associated with restructuring a business post acquisition as a means to extract value, including when restructuring is the best option and the forms of restructuring that can be considered. Each form of restructuring after an acquisition is again modelled using a case company. 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 financial modelling.

By the end of this course participants will understand: The decision making process for various types of value extraction post acquisition How to model different types of value maximisation by way of disposal The restructuring process for the capital structure of an acquired business and in which circum-

stances to apply it How to model and assess different restructuring options

Much of the course work involves Excel modelling and analysis, equipping participants with the tools to analyse corporate transactions: Building up from partially-complete models Working with integrated financial statements Running scenarios, iterating and optimising

Each participant should bring a laptop with USB port to the course to facilitate modelling work

Refresher: Accounting for corporate transactions Different types of transaction and how they

are modelled in practice Consolidation accounting under the current

IFRS 3 and IAS 27 Accounting for disposals Partial disposals creating a NCI Partial disposal loss of control Recent changes to acquisition accounting

under IFRS

Case study The participants will model

the initial acquisition transaction that will form the basis for the post acquisition analysis and value the combined business to arrive at a staring valuation Overview of post-acquisition corporate transactions Historic trends in corporate disposals Involuntary disposals vs voluntary disposals Reasons for voluntary disposals Accounting for different types of disposal

Asset sales Partial disposal of equity Full disposal of equity

Disposals, spin offs, carve outs and other

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disposal options Restructuring and recapitalisation

Disposal and spin off process Disposal or spin off decision

Completing the financial analysis Formulation of the restructuring plan

Relationship between the parent and subsidiary

Determining the assets and liabilities of the disposal

Dealing with shareholders Completing the deal

Financial evaluation of a disposal Estimation of after tax cash flows Determination of the disposal units risk

adjusted discount rate Present value of the disposal related cash

flows Assessing the market value of liabilities Calculating disposal proceeds and value

creation

Modelling asset disposal post- acquisition Asset restructuring and value creation Removing a diversification discount, addi-

tivity in practice Using equity to restructure, share repur-

chases Asset disposals the decision process and

modelling a transaction

Case study The participants will model the first approach to value creation post-acquisition transaction by reviewing an operating unit of the acquired business to determine whether to dispose of any of the assets of the unit by way of asset sale to enhance the value of the acquired business. The participants will then analyse the resulting business

Modelling a spin off post- acquisition Trends in spin offs, involuntary spin offs

and defensive spin offs Potential tax issues with spin offs Treatments of warrants and convertible

securities Seller financial assistance Allocation of debt and bond obligations Wealth effect of spins offs in capital mar-

kets

Case study The participants will review the various subsidiaries of the acquired

business to determine whether to dispose of any of the units by way of spin off to enhance the value of the acquired business. The participants will then model the spin off transaction and analyse the resulting business.

Modelling equity carve outs post- acquisition Background to equity carve out in capital

markets Characteristics of carve out firms Use of carve out proceeds Carve outs vs IPOs Carve outs vs spin offs

Equity carve out or IPO the decision pro-cess and modelling a transaction

Case study The participants will review the various subsidiaries of the acquired business to determine whether to dispose of any of the units by way of carve out to enhance the value of the acquired business. The participants will then model the carve out transaction and analyse the resulting business.

Assessing asset restructuring Sum of the parts valuation Assessing restructuring costs and benefits Undertaking a restructuring analysis for a

business Sum of the parts valuation multiples Sum of the parts valuation free cash

flows Valuing the effect of cost reduction Monetising real estate Share repurchases

Other options voluntary liquidation or bust ups

Developing a restructuring plan for disposals

Case study The participants will complete a series of case studies on various aspects of an asset restructuring. The participants will also analyse and assess the various restructuring options to determine which will create the most value.

Restructuring companies post acquisition Overview of companies that may require re-

structuring post acquisition Types of business failure Causes of business failure and options for

dealing with them Bankruptcy trends Dealing with financial distress Framework for recapitalisations

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Case study The participants are introduced to a new transaction between a healthy and distressed company. The participants model the transaction and value the combined business.

Restructuring options post acquisition Out of court workouts and bankruptcy

Out of court workouts In court reorganisation Pre-packaged bankruptcy Liquidation

Reorganisation vs liquidation Reorganisation process corporate control

and default Accounting treatment

Troubled debt restructuring Asset impairment Fresh start accounting

Valuing recapitalisations Valuing new debt Valuing equity Recovery value Recapitalisation rights and options

Case study The participants model the various types of distressed company restructuring options and determine which option is preferable. The participants also value different elements of the post- acquisition transactions to assess various recapitalisation options.

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Valuing Rapid Growth Companies and SectorsIn House

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Course Overview

This advanced valuation and modelling course looks at the valuation approaches to be taken to enable participants to value sectors which may be at differing stages of development and growth profiles. Traditional valuation techniques assume a simple two or three stage growth profile and a terminal value or basic multiple based valuation tools. This course looks at some of the more difficult companies to value based on the underlying fundamentals of the sector in which the company operates.

The course covers companies at the rapidly growing phase of development which, depending on the geographic location, may cover media, telecoms and pharmaceutical sectors. As well as discussed some of the current issues with traditional cash flow and multiple based valuation approaches the course will cover more advanced valuation approaches such as decisions trees, simulations, scenario analysis and real option valuation. The course will also consider the role of risk assessment in the valuation process and how macro-economic analysis can affect the valuation approach taken.

Examples are provided to illustrate each issue.

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

Overview of valuation approaches Intrinsic valuation traditional cash flow

techniques Relative valuation multiple based analysis Adapting risk time varying WACC Adjusting for survival

Other valuation issues Assessing risk the risky risk free rate and

other current valuation issues The economic cycle incorporating mac-

ro-economic factors into a valuation

Valuing rapid growth companies and sectors A life cycle view of rapid growth companies

The rapid growth company in context Characteristics of growth companies and

sectors How are growth companies different?

Valuation issues intrinsic value How historic numbers are misleading How asset life may develop in the high

growth phase How existing assets differ in a rapid

growth business Where the bulk of value is created by

a rapid growth company the growth phase

Capital intensity and the rapid growth business

The development of risk during the growth phase

The stage at which a terminal value should be calculated for a rapid growth

business Value of equity claims

The differing equity claims in a rapid growth business

Participation by different equity holders Valuation issues relative valuation

Peer groups Finding similar growth businesses differ-

ent sectors? Risk measures adapting a multiple analy-

sis for risk

Valuing a growth business in practice Main errors made in valuing growth busi-

nesses Dealing with immature markets Assessing product cycles Ability to execute the key driver

Valuing the operating assets through the growth phase How operating asset lives develop in the

high growth phase Ensuring consistency in a valuation Reinvestment and growth Assessing investment requirements the

returns and reinvestment equation Completing the valuation combining re-

turns and risk in a model

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Applied Financial Mathematics in Excel Training

In-House

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Course Overview

This workshop focusses on the underlying mathematics techniques which underpin project finance, energy, leasing and other analysis models. Rather than using a financial calculator such as an HP12C, the workshop demonstrates how to apply financial mathematics to Excel effectively.

Starting with a review of model design, the workshop introduces present and future values and shows how these basic concepts can be used to solve a range of financial mathematics problems. The workshop ranges over complex cash flows, depreciation, structured amortisation, fixed income, derivatives and data analysis.

Workshop ObjectivesThis one-day workshop explores:

Financial concepts underpinning a range of models Model design standards Cash flow methods Fixed income models Derivative concepts Basic statistics

The workshop is highly practical and each session begins with a discussion of each technique followed by practical exercises. At the end of the workshop, delegates will understand how to apply financial mathematics to Excel spreadsheets.

Workshop Teaching MethodThe programme is taught using formal lectures combined with practical and interactive case studies and exercises to reinforce the concepts covered in each teaching session. Emp

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