{"product_id":"investment-banking-isbn-9781119823377","title":"Investment Banking","description":"\u003cb\u003eInvestment Banking\u003c\/b\u003e \u003cp\u003e\u003cb\u003ePraise for Investment Banking, UNIVERSITY EDITION\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e“This book will surely become an indispensable guide to the art of buyout and M\u0026amp;A valuation, for the experienced investment practitioner as well as for the non-professional seeking to learn the mysteries of valuation.”\u003cbr\u003e —\u003cb\u003eDavid M. Rubenstein,\u003c\/b\u003e Co-Founder and Co-Executive Chairman, The Carlyle Group Host, \u003ci\u003eThe David Rubenstein Show: Peer to Peer Conversations\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e“The two Joshes present corporate finance in a broad, yet detailed framework for understanding valuation, balance sheets, and business combinations. As such, their book is an essential resource for understanding complex businesses and capital structures whether you are on the buy-side or sell-side.”\u003cbr\u003e —\u003cb\u003eMitchell R. Julis,\u003c\/b\u003e Co-Chairman and Co-CEO, Canyon Partners, LLC \u003c\/p\u003e\u003cp\u003e“\u003ci\u003eInvestment Banking\u003c\/i\u003e provides a highly practical and relevant guide to the valuation analysis at the core of investment banking, private equity, and corporate finance. Mastery of these essential skills is fundamental for any role in transaction-related finance. This book will become a fixture on every finance professional’s bookshelf.”\u003cbr\u003e —\u003cb\u003eThomas H. Lee,\u003c\/b\u003e President, Lee Equity Partners, LLC Founder, Thomas H. Lee Capital Management, LLC \u003c\/p\u003e\u003cp\u003e“As a pioneer in public equities, Nasdaq is excited to be partnering with Rosenbaum and Pearl on \u003ci\u003eInvestment Banking\u003c\/i\u003e as they break new ground on content related to IPOs, direct listings, and SPACs. We recommend the book for any shareholder and senior executive looking to take a company public, as well as their bankers and lawyers.”\u003cbr\u003e —\u003cb\u003eAdena Friedman,\u003c\/b\u003e President and CEO, Nasdaq \u003c\/p\u003e\u003cp\u003e“\u003ci\u003eInvestment Banking\u003c\/i\u003e requires a skill set that combines both art and science. While numerous textbooks provide students with the core principles of financial economics, the rich institutional considerations that are essential on Wall Street are not well documented. This book represents an important step in filling this gap.”\u003cbr\u003e —\u003cb\u003eJosh Lerner,\u003c\/b\u003e Jacob H. Schiff Professor of Investment Banking, Harvard Business School Co-author, \u003ci\u003eVenture Capital and Private Equity: A Casebook\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e“Valuation is the key to any transaction. \u003ci\u003eInvestment Banking\u003c\/i\u003e provides specific step-by-step valuation procedures for LBO and M\u0026amp;A transactions, with lots of diagrams and numerical examples.”\u003cbr\u003e —\u003cb\u003eRoger G. Ibbotson,\u003c\/b\u003e Professor in the Practice of Finance, Yale School of Management Chairman and CIO, Zebra Capital Management, LLC Founder, Ibbotson Associates \u003c\/p\u003e\u003cp\u003e“\u003ci\u003eInvestment Banking\u003c\/i\u003e provides fresh insight and perspective to valuation analysis, the basis for every great trade and winning deal on Wall Street. The book is written from the perspective of practitioners, setting it apart from other texts.”\u003cbr\u003e —\u003cb\u003eGregory Zuckerman,\u003c\/b\u003e Special Writer, \u003ci\u003eThe Wall Street Journal\u003c\/i\u003e Author, \u003ci\u003eThe Greatest Trade Ever, The Frackers,\u003c\/i\u003e and \u003ci\u003eThe Man Who Solved the Market\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003eAlso available from the authors:\u003cbr\u003e \u003cb\u003e\u003ci\u003eInvestment Banking WORKBOOK\u003cbr\u003e Investment Banking FOCUS NOTES\u003cbr\u003e Investment Banking ONLINE COURSE\u003c\/i\u003e\u003c\/b\u003e\u003cbr\u003e www.efficientlearning.com\/investment-banking \u003c\/p\u003e\u003cp\u003eInstructor and Student Resources xv\u003c\/p\u003e \u003cp\u003eAbout the Authors xix\u003c\/p\u003e \u003cp\u003eAbout the Editors xxi\u003c\/p\u003e \u003cp\u003eForeword xxiii\u003c\/p\u003e \u003cp\u003eAcknowledgments xxv\u003c\/p\u003e \u003cp\u003eDisclaimer xxxiii\u003c\/p\u003e \u003cp\u003e\u003cb\u003eIntroduction 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStructure of the Book 3\u003c\/p\u003e \u003cp\u003ePart One: Valuation (Chapters 1–3) 3\u003c\/p\u003e \u003cp\u003ePart Two: Leveraged Buyouts (Chapters 4 \u0026amp; 5) 5\u003c\/p\u003e \u003cp\u003ePart Three: Mergers \u0026amp; Acquisitions (Chapters 6 \u0026amp; 7) 6\u003c\/p\u003e \u003cp\u003ePart Four: Initial Public Offerings (Chapters 8 \u0026amp; 9) 8\u003c\/p\u003e \u003cp\u003eValueCo Summary Financial Information 9\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart One Valuation 11\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1 Comparable Companies Analysis 13\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSummary of Comparable Companies Analysis Steps 14\u003c\/p\u003e \u003cp\u003eStep I. Select the Universe of Comparable Companies 17\u003c\/p\u003e \u003cp\u003eStudy the Target 17\u003c\/p\u003e \u003cp\u003eIdentify Key Characteristics of the Target for Comparison Purposes 18\u003c\/p\u003e \u003cp\u003eScreen for Comparable Companies 22\u003c\/p\u003e \u003cp\u003eStep II. Locate The Necessary Financial Information 23\u003c\/p\u003e \u003cp\u003eSEC Filings: 10-K, 10-Q, 8-K, and Proxy Statement 24\u003c\/p\u003e \u003cp\u003eEquity Research 25\u003c\/p\u003e \u003cp\u003ePress Releases and News Runs 26\u003c\/p\u003e \u003cp\u003eFinancial Information Services 26\u003c\/p\u003e \u003cp\u003eSummary of Financial Data Primary Sources 27\u003c\/p\u003e \u003cp\u003eStep III. Spread Key Statistics, Ratios, and Trading Multiples 28\u003c\/p\u003e \u003cp\u003eCalculation of Key Financial Statistics and Ratios 28\u003c\/p\u003e \u003cp\u003eSupplemental Financial Concepts and Calculations 42\u003c\/p\u003e \u003cp\u003eCalculation of Key Trading Multiples 47\u003c\/p\u003e \u003cp\u003eStep IV. Benchmark the Comparable Companies 50\u003c\/p\u003e \u003cp\u003eBenchmark the Financial Statistics and Ratios 50\u003c\/p\u003e \u003cp\u003eBenchmark the Trading Multiples 50\u003c\/p\u003e \u003cp\u003eStep V. Determine Valuation 51\u003c\/p\u003e \u003cp\u003eValuation Implied by EV\/EBITDA 52\u003c\/p\u003e \u003cp\u003eValuation Implied by P\/E 52\u003c\/p\u003e \u003cp\u003eKey Pros and Cons 54\u003c\/p\u003e \u003cp\u003eIllustrative Comparable Companies Analysis for ValueCo 55\u003c\/p\u003e \u003cp\u003eStep I. Select the Universe of Comparable Companies 55\u003c\/p\u003e \u003cp\u003eStep II. Locate the Necessary Financial Information 57\u003c\/p\u003e \u003cp\u003eStep III. Spread Key Statistics, Ratios, and Trading Multiples 57\u003c\/p\u003e \u003cp\u003eStep IV. Benchmark the Comparable Companies 69\u003c\/p\u003e \u003cp\u003eStep V. Determine Valuation 74\u003c\/p\u003e \u003cp\u003eChapter 1 Questions 75\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Precedent Transactions Analysis 79\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSummary of Precedent Transactions Analysis Steps 80\u003c\/p\u003e \u003cp\u003eStep I. Select the Universe of Comparable Acquisitions 83\u003c\/p\u003e \u003cp\u003eScreen for Comparable Acquisitions 83\u003c\/p\u003e \u003cp\u003eExamine Other Considerations 84\u003c\/p\u003e \u003cp\u003eStep II. Locate the Necessary Deal-Related and Financial Information 86\u003c\/p\u003e \u003cp\u003ePublic Targets 86\u003c\/p\u003e \u003cp\u003ePrivate Targets 89\u003c\/p\u003e \u003cp\u003eSummary of Primary SEC Filings in M\u0026amp;A Transactions 90\u003c\/p\u003e \u003cp\u003eStep III. Spread Key Statistics, Ratios, and Transaction Multiples 92\u003c\/p\u003e \u003cp\u003eCalculation of Key Financial Statistics and Ratios 92\u003c\/p\u003e \u003cp\u003eCalculation of Key Transaction Multiples 98\u003c\/p\u003e \u003cp\u003eStep IV. Benchmark the Comparable Acquisitions 102\u003c\/p\u003e \u003cp\u003eStep V. Determine Valuation 102\u003c\/p\u003e \u003cp\u003eKey Pros and Cons 103\u003c\/p\u003e \u003cp\u003eIllustrative Precedent Transaction Analysis for ValueCo 104\u003c\/p\u003e \u003cp\u003eStep I. Select the Universe of Comparable Acquisitions 104\u003c\/p\u003e \u003cp\u003eStep II. Locate the Necessary Deal-Related and Financial Information 105\u003c\/p\u003e \u003cp\u003eStep III. Spread Key Statistics, Ratios, and Transaction Multiples 107\u003c\/p\u003e \u003cp\u003eStep IV. Benchmark the Comparable Acquisitions 115\u003c\/p\u003e \u003cp\u003eStep V. Determine Valuation 117\u003c\/p\u003e \u003cp\u003eChapter 2 Questions 118\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Discounted Cash Flow Analysis 123\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSummary of Discounted Cash Flow Analysis Steps 124\u003c\/p\u003e \u003cp\u003eStep I. Study the Target and Determine Key Performance Drivers 128\u003c\/p\u003e \u003cp\u003eStudy the Target 128\u003c\/p\u003e \u003cp\u003eDetermine Key Performance Drivers 128\u003c\/p\u003e \u003cp\u003eStep II. Project Free Cash Flow 129\u003c\/p\u003e \u003cp\u003eConsiderations for Projecting Free Cash Flow 129\u003c\/p\u003e \u003cp\u003eProjection of Sales, EBITDA, and EBIT 131\u003c\/p\u003e \u003cp\u003eProjection of Free Cash Flow 133\u003c\/p\u003e \u003cp\u003eStep III. Calculate Weighted Average Cost of Capital 139\u003c\/p\u003e \u003cp\u003eStep III(a): Determine Target Capital Structure 140\u003c\/p\u003e \u003cp\u003eStep III(b): Estimate Cost of Debt (r d) 141\u003c\/p\u003e \u003cp\u003eStep III(c): Estimate Cost of Equity (r e) 142\u003c\/p\u003e \u003cp\u003eStep III(d): Calculate WACC 146\u003c\/p\u003e \u003cp\u003eStep IV. Determine Terminal Value 146\u003c\/p\u003e \u003cp\u003eExit Multiple Method 147\u003c\/p\u003e \u003cp\u003ePerpetuity Growth Method 147\u003c\/p\u003e \u003cp\u003eStep V. Calculate Present Value and Determine Valuation 149\u003c\/p\u003e \u003cp\u003eCalculate Present Value 149\u003c\/p\u003e \u003cp\u003eDetermine Valuation 151\u003c\/p\u003e \u003cp\u003ePerform Sensitivity Analysis 153\u003c\/p\u003e \u003cp\u003eKey Pros and Cons 154\u003c\/p\u003e \u003cp\u003eIllustrative Discounted Cash Flow Analysis for ValueCo 155\u003c\/p\u003e \u003cp\u003eStep I. Study the Target and Determine Key Performance Drivers 155\u003c\/p\u003e \u003cp\u003eStep II. Project Free Cash Flow 155\u003c\/p\u003e \u003cp\u003eProjection of Sales, EBITDA, and EBIT 157\u003c\/p\u003e \u003cp\u003eStep III. Calculate Weighted Average Cost of Capital 162\u003c\/p\u003e \u003cp\u003eStep IV. Determine Terminal Value 167\u003c\/p\u003e \u003cp\u003eStep V. Calculate Present Value and Determine Valuation 169\u003c\/p\u003e \u003cp\u003eChapter 3 Questions 174\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Two Leveraged Buyouts 179\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4 Leveraged Buyouts 181\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eKey Participants 183\u003c\/p\u003e \u003cp\u003eFinancial Sponsors 183\u003c\/p\u003e \u003cp\u003eInvestment Banks 184\u003c\/p\u003e \u003cp\u003eBank and Institutional Lenders 186\u003c\/p\u003e \u003cp\u003eBond Investors 187\u003c\/p\u003e \u003cp\u003ePrivate Credit Funds 188\u003c\/p\u003e \u003cp\u003eTarget Management 188\u003c\/p\u003e \u003cp\u003eCharacteristics of a Strong LBO Candidate 189\u003c\/p\u003e \u003cp\u003eStrong Cash Flow Generation 190\u003c\/p\u003e \u003cp\u003eLeading and Defensible Market Positions 190\u003c\/p\u003e \u003cp\u003eGrowth Opportunities 190\u003c\/p\u003e \u003cp\u003eEfficiency Enhancement Opportunities 191\u003c\/p\u003e \u003cp\u003eLow Capex Requirements 191\u003c\/p\u003e \u003cp\u003eStrong Asset Base 192\u003c\/p\u003e \u003cp\u003eProven Management Team 192\u003c\/p\u003e \u003cp\u003eEconomics of LBOs 193\u003c\/p\u003e \u003cp\u003eReturns Analysis—Internal Rate of Return 193\u003c\/p\u003e \u003cp\u003eReturns Analysis—Cash Return 194\u003c\/p\u003e \u003cp\u003eHow LBOs Generate Returns 194\u003c\/p\u003e \u003cp\u003eHow Leverage Is Used to Enhance Returns 196\u003c\/p\u003e \u003cp\u003ePrimary Exit\/Monetization Strategies 199\u003c\/p\u003e \u003cp\u003eSale of Business 199\u003c\/p\u003e \u003cp\u003eInitial Public Offering 200\u003c\/p\u003e \u003cp\u003eDividends \/ Dividend Recapitalization 200\u003c\/p\u003e \u003cp\u003eBelow Par Debt Repurchase 200\u003c\/p\u003e \u003cp\u003eLBO Financing: Structure 201\u003c\/p\u003e \u003cp\u003eLBO Financing: Primary Sources 204\u003c\/p\u003e \u003cp\u003eSecured Debt 204\u003c\/p\u003e \u003cp\u003eHigh Yield Bonds 208\u003c\/p\u003e \u003cp\u003eMezzanine Debt 210\u003c\/p\u003e \u003cp\u003eEquity Contribution 211\u003c\/p\u003e \u003cp\u003eLBO Financing: Selected Key Terms 214\u003c\/p\u003e \u003cp\u003eSecurity 214\u003c\/p\u003e \u003cp\u003eSeniority 214\u003c\/p\u003e \u003cp\u003eMaturity 215\u003c\/p\u003e \u003cp\u003eCoupon 216\u003c\/p\u003e \u003cp\u003eCall Protection 217\u003c\/p\u003e \u003cp\u003eCovenants 218\u003c\/p\u003e \u003cp\u003eTerm Sheets 221\u003c\/p\u003e \u003cp\u003eLBO Financing: Determining Financing Structure 224\u003c\/p\u003e \u003cp\u003eChapter 4 Questions 229\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 LBO Analysis 233\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eFinancing Structure 233\u003c\/p\u003e \u003cp\u003eValuation 234\u003c\/p\u003e \u003cp\u003eStep I. Locate and Analyze the Necessary Information 236\u003c\/p\u003e \u003cp\u003eStep II. Build the Pre-LBO Model 236\u003c\/p\u003e \u003cp\u003eStep II(a): Build Historical and Projected Income Statement through EBIT 237\u003c\/p\u003e \u003cp\u003eStep II(b): Input Opening Balance Sheet and Project Balance Sheet Items 240\u003c\/p\u003e \u003cp\u003eStep II(c): Build Cash Flow Statement through Investing Activities 242\u003c\/p\u003e \u003cp\u003eOperating Activities 242\u003c\/p\u003e \u003cp\u003eStep III. Input Transaction Structure 245\u003c\/p\u003e \u003cp\u003eStep III(a): Enter Purchase Price Assumptions 245\u003c\/p\u003e \u003cp\u003eStep III(b): Enter Financing Structure into Sources and Uses 247\u003c\/p\u003e \u003cp\u003eStep III(c): Link Sources and Uses to Balance Sheet Adjustments Columns 248\u003c\/p\u003e \u003cp\u003eUses of Funds Links 251\u003c\/p\u003e \u003cp\u003eStep IV. Complete the Post-LBO Model 254\u003c\/p\u003e \u003cp\u003eStep IV(a): Build Debt Schedule 254\u003c\/p\u003e \u003cp\u003eStep IV(b): Complete Pro Forma Income Statement from EBIT to Net Income 263\u003c\/p\u003e \u003cp\u003eStep IV(c): Complete Pro Forma Balance Sheet 266\u003c\/p\u003e \u003cp\u003eStep IV(d): Complete Pro Forma Cash Flow Statement 268\u003c\/p\u003e \u003cp\u003eStep V. Perform LBO Analysis 270\u003c\/p\u003e \u003cp\u003eStep V(a): Analyze Financing Structure 270\u003c\/p\u003e \u003cp\u003eStep V(b): Perform Returns Analysis 272\u003c\/p\u003e \u003cp\u003eStep V(c): Determine Valuation 276\u003c\/p\u003e \u003cp\u003eStep V(d): Create Transaction Summary Page 277\u003c\/p\u003e \u003cp\u003eIllustrative LBO Analysis for ValueCo 278\u003c\/p\u003e \u003cp\u003eChapter 5 Questions 288\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Three Mergers \u0026amp; Acquisitions 293\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6 Sell-Side M\u0026amp;A 295\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eAuctions 296\u003c\/p\u003e \u003cp\u003eAuction Structure 299\u003c\/p\u003e \u003cp\u003eOrganization and Preparation 299\u003c\/p\u003e \u003cp\u003eIdentify Seller Objectives and Determine Appropriate Sale Process 299\u003c\/p\u003e \u003cp\u003ePerform Sell-Side Advisor Due Diligence and Preliminary Valuation Analysis 301\u003c\/p\u003e \u003cp\u003eSelect Buyer Universe 301\u003c\/p\u003e \u003cp\u003ePrepare Marketing Materials 302\u003c\/p\u003e \u003cp\u003ePrepare Confidentiality Agreement 305\u003c\/p\u003e \u003cp\u003eFirst Round 306\u003c\/p\u003e \u003cp\u003eContact Prospective Buyers 306\u003c\/p\u003e \u003cp\u003eNegotiate and Execute Confidentiality Agreement with Interested Parties 306\u003c\/p\u003e \u003cp\u003eDistribute Confidential Information Memorandum and Initial Bid Procedures Letter 307\u003c\/p\u003e \u003cp\u003ePrepare Management Presentation 308\u003c\/p\u003e \u003cp\u003eSet Up Data Room 309\u003c\/p\u003e \u003cp\u003ePrepare Stapled Financing Package (if applicable) 311\u003c\/p\u003e \u003cp\u003eReceive Initial Bids and Select Buyers to Proceed to Second Round 311\u003c\/p\u003e \u003cp\u003eSecond Round 313\u003c\/p\u003e \u003cp\u003eConduct Management Presentations 313\u003c\/p\u003e \u003cp\u003eFacilitate Site Visits 314\u003c\/p\u003e \u003cp\u003eProvide Data Room Access and Respond to Diligence Requests 314\u003c\/p\u003e \u003cp\u003eDistribute Final Bid Procedures Letter and Draft Definitive Agreement 315\u003c\/p\u003e \u003cp\u003eReceive Final Bids 316\u003c\/p\u003e \u003cp\u003eNegotiations 320\u003c\/p\u003e \u003cp\u003eEvaluate Final Bids 320\u003c\/p\u003e \u003cp\u003eNegotiate with Preferred Buyer(s) 320\u003c\/p\u003e \u003cp\u003eSelect Winning Bidder 320\u003c\/p\u003e \u003cp\u003eRender Fairness Opinion (if required) 321\u003c\/p\u003e \u003cp\u003eReceive Board\/Owner Approval and Execute Definitive Agreement 321\u003c\/p\u003e \u003cp\u003eClosing 322\u003c\/p\u003e \u003cp\u003eObtain Necessary Approvals 322\u003c\/p\u003e \u003cp\u003eShareholder Approval 323\u003c\/p\u003e \u003cp\u003eFinancing and Closing 325\u003c\/p\u003e \u003cp\u003eNegotiated Sale 326\u003c\/p\u003e \u003cp\u003eChapter 6 Questions 328\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Buy-Side M\u0026amp;A 331\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBuyer Motivation 332\u003c\/p\u003e \u003cp\u003eSynergies 333\u003c\/p\u003e \u003cp\u003eCost Synergies 334\u003c\/p\u003e \u003cp\u003eRevenue Synergies 334\u003c\/p\u003e \u003cp\u003eAcquisition Strategies 335\u003c\/p\u003e \u003cp\u003eHorizontal Integration 335\u003c\/p\u003e \u003cp\u003eVertical Integration 335\u003c\/p\u003e \u003cp\u003eConglomeration 336\u003c\/p\u003e \u003cp\u003eForm of Financing 337\u003c\/p\u003e \u003cp\u003eCash on Hand 338\u003c\/p\u003e \u003cp\u003eDebt Financing 338\u003c\/p\u003e \u003cp\u003eEquity Financing 339\u003c\/p\u003e \u003cp\u003eDebt vs. Equity Financing Summary—Acquirer Perspective 340\u003c\/p\u003e \u003cp\u003eDeal Structure 340\u003c\/p\u003e \u003cp\u003eStock Sale 340\u003c\/p\u003e \u003cp\u003eAsset Sale 343\u003c\/p\u003e \u003cp\u003eStock Sales Treated as Asset Sales for Tax Purposes 346\u003c\/p\u003e \u003cp\u003eBuy-Side Valuation 349\u003c\/p\u003e \u003cp\u003eFootball Field 349\u003c\/p\u003e \u003cp\u003eAnalysis at Various Prices 352\u003c\/p\u003e \u003cp\u003eContribution Analysis 353\u003c\/p\u003e \u003cp\u003eMerger Consequences Analysis 355\u003c\/p\u003e \u003cp\u003ePurchase Price Assumptions 355\u003c\/p\u003e \u003cp\u003eBalance Sheet Effects 360\u003c\/p\u003e \u003cp\u003eAccretion\/(Dilution) Analysis 365\u003c\/p\u003e \u003cp\u003eAcquisition Scenarios—I) 50% Stock\/50% Cash; II) 100% Cash; and III) 100% Stock 368\u003c\/p\u003e \u003cp\u003eIllustrative Merger Consequences Analysis for the BuyerCo \/ ValueCo Transaction 373\u003c\/p\u003e \u003cp\u003eChapter 7 Questions 394\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePart Four Initial Public Offerings 399\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Initial Public Offerings 401\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Do Companies Go Public? 402\u003c\/p\u003e \u003cp\u003eCharacteristics of a Strong IPO Candidate 404\u003c\/p\u003e \u003cp\u003eAttractive Industry 404\u003c\/p\u003e \u003cp\u003eStrong Competitive Position 404\u003c\/p\u003e \u003cp\u003eGrowth Opportunities 405\u003c\/p\u003e \u003cp\u003eMoat \u0026amp; Barriers to Entry 406\u003c\/p\u003e \u003cp\u003eHealthy Financial Profile 406\u003c\/p\u003e \u003cp\u003eDisruptive \u0026amp; Differentiated Solutions 407\u003c\/p\u003e \u003cp\u003eFavorable Risk Profile 407\u003c\/p\u003e \u003cp\u003eProven Management Team 408\u003c\/p\u003e \u003cp\u003eKey Participants 409\u003c\/p\u003e \u003cp\u003eInvestment Banks 409\u003c\/p\u003e \u003cp\u003eCompany Management 412\u003c\/p\u003e \u003cp\u003eCurrent Owners \/ Investors 413\u003c\/p\u003e \u003cp\u003eIPO Investors 413\u003c\/p\u003e \u003cp\u003eLawyers 414\u003c\/p\u003e \u003cp\u003eAccountants 414\u003c\/p\u003e \u003cp\u003eExchange Partner 415\u003c\/p\u003e \u003cp\u003eIPO Advisors 416\u003c\/p\u003e \u003cp\u003eVendors 416\u003c\/p\u003e \u003cp\u003eSelected Key Terms 417\u003c\/p\u003e \u003cp\u003eOffering Size 418\u003c\/p\u003e \u003cp\u003ePrimary \/ Secondary 419\u003c\/p\u003e \u003cp\u003eOverallotment Option, a.k.a. “Greenshoe” 420\u003c\/p\u003e \u003cp\u003eSyndicate Structure 421\u003c\/p\u003e \u003cp\u003eLock-up Provision 422\u003c\/p\u003e \u003cp\u003eListing Exchange 422\u003c\/p\u003e \u003cp\u003eGross Spread 423\u003c\/p\u003e \u003cp\u003eDual-Track Process 424\u003c\/p\u003e \u003cp\u003eSpecial Purpose Acquisition Companies (SPACs) 427\u003c\/p\u003e \u003cp\u003eDirect Listings 429\u003c\/p\u003e \u003cp\u003ePost-IPO Equity Offerings 432\u003c\/p\u003e \u003cp\u003eIPO Considerations 433\u003c\/p\u003e \u003cp\u003eChapter 8 Questions 435\u003c\/p\u003e \u003cp\u003eNasdaq Appendix 439\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 The IPO Process 443\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eOrganization and Preparation 445\u003c\/p\u003e \u003cp\u003eSelect IPO Team, Exchange Partner, and Assign Responsibilities 445\u003c\/p\u003e \u003cp\u003eManage Corporate Housekeeping 448\u003c\/p\u003e \u003cp\u003ec corp vs. Up-c Structure 453\u003c\/p\u003e \u003cp\u003eDetermine IPO Timing 455\u003c\/p\u003e \u003cp\u003eDetermine Offering Structure and Preliminary IPO Valuation 456\u003c\/p\u003e \u003cp\u003eHost Organizational Meeting 459\u003c\/p\u003e \u003cp\u003eDue Diligence, Drafting, and Filing 460\u003c\/p\u003e \u003cp\u003ePerform Underwriter Due Diligence 460\u003c\/p\u003e \u003cp\u003eDraft and File the Registration Statement 461\u003c\/p\u003e \u003cp\u003ePrepare Other Key Transaction and Corporate Governance Documents 466\u003c\/p\u003e \u003cp\u003eCoordinate with Equity Research 467\u003c\/p\u003e \u003cp\u003eRespond to SEC Comments and File Amended Registration Statement 467\u003c\/p\u003e \u003cp\u003eMarketing and Roadshow 468\u003c\/p\u003e \u003cp\u003ePrepare Marketing Materials 468\u003c\/p\u003e \u003cp\u003eSalesforce Teach-in 469\u003c\/p\u003e \u003cp\u003eConduct Roadshow 470\u003c\/p\u003e \u003cp\u003eBuild Order Book 473\u003c\/p\u003e \u003cp\u003ePricing and Allocation 475\u003c\/p\u003e \u003cp\u003ePrice the Offering 475\u003c\/p\u003e \u003cp\u003eAllocate Shares to Investors 477\u003c\/p\u003e \u003cp\u003eClosing 477\u003c\/p\u003e \u003cp\u003eChapter 9 Questions 479\u003c\/p\u003e \u003cp\u003eSolutions to Selected Questions 485\u003c\/p\u003e \u003cp\u003eAfterword 513\u003c\/p\u003e \u003cp\u003eBibliography and Recommended Reading 515\u003c\/p\u003e \u003cp\u003eIndex 521\u003c\/p\u003e \u003cp\u003e\u003cb\u003eJOSHUA ROSENBAUM\u003c\/b\u003e is a Managing Director and Head of the Industrials \u0026amp; Diversified Services Group at RBC Capital Markets. He originates, structures, and advises on M\u0026amp;A, corporate finance, and capital markets transactions. Previously, he worked at UBS Investment Bank and the International Finance Corporation, the direct investment division of the World Bank. He received his AB from Harvard and his MBA with Baker Scholar honors from Harvard Business School.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eJOSHUA PEARL\u003c\/b\u003e has served as a Managing Director at Brahman Capital, a long\/short equity asset manager. He focuses on public equity investments and special situations utilizing a fundamentals-based approach. Previously, he structured high yield financings, leveraged buyouts, and restructurings as a Director at UBS Investment Bank. Prior to UBS, he worked at Moelis \u0026amp; Company and Deutsche Bank. He received his BS in Business from Indiana University's Kelley School of Business.\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePraise for Investment Banking, UNIVERSITY EDITION\u003c\/b\u003e\u003c\/p\u003e\u003cp\u003e“This book will surely become an indispensable guide to the art of buyout and M\u0026amp;A valuation, for the experienced investment practitioner as well as for the non-professional seeking to learn the mysteries of valuation.”\u003cbr\u003e—\u003cb\u003eDavid M. Rubenstein,\u003c\/b\u003e Co-Founder and Co-Executive Chairman, The Carlyle Group Host, \u003ci\u003eThe David Rubenstein Show: Peer to Peer Conversations\u003c\/i\u003e\u003c\/p\u003e\u003cp\u003e“The two Joshes present corporate finance in a broad, yet detailed framework for understanding valuation, balance sheets, and business combinations. As such, their book is an essential resource for understanding complex businesses and capital structures whether you are on the buy-side or sell-side.”\u003cbr\u003e—\u003cb\u003eMitchell R. Julis,\u003c\/b\u003e Co-Chairman and Co-CEO, Canyon Partners, LLC\u003c\/p\u003e\u003cp\u003e“\u003ci\u003eInvestment Banking\u003c\/i\u003e provides a highly practical and relevant guide to the valuation analysis at the core of investment banking, private equity, and corporate finance. Mastery of these essential skills is fundamental for any role in transaction-related finance. This book will become a fixture on every finance professional’s bookshelf.”\u003cbr\u003e—\u003cb\u003eThomas H. Lee,\u003c\/b\u003e President, Lee Equity Partners, LLC Founder, Thomas H. Lee Capital Management, LLC\u003c\/p\u003e\u003cp\u003e“As a pioneer in public equities, Nasdaq is excited to be partnering with Rosenbaum and Pearl on \u003ci\u003eInvestment Banking\u003c\/i\u003e as they break new ground on content related to IPOs, direct listings, and SPACs. We recommend the book for any shareholder and senior executive looking to take a company public, as well as their bankers and lawyers.”\u003cbr\u003e—\u003cb\u003eAdena Friedman,\u003c\/b\u003e President and CEO, Nasdaq\u003c\/p\u003e\u003cp\u003e“\u003ci\u003eInvestment Banking\u003c\/i\u003e requires a skill set that combines both art and science. While numerous textbooks provide students with the core principles of financial economics, the rich institutional considerations that are essential on Wall Street are not well documented. This book represents an important step in filling this gap.”\u003cbr\u003e—\u003cb\u003eJosh Lerner,\u003c\/b\u003e Jacob H. Schiff Professor of Investment Banking, Harvard Business School Co-author, \u003ci\u003eVenture Capital and Private Equity: A Casebook\u003c\/i\u003e\u003c\/p\u003e\u003cp\u003e“Valuation is the key to any transaction. \u003ci\u003eInvestment Banking\u003c\/i\u003e provides specific step-by-step valuation procedures for LBO and M\u0026amp;A transactions, with lots of diagrams and numerical examples.”\u003cbr\u003e—\u003cb\u003eRoger G. Ibbotson,\u003c\/b\u003e Professor in the Practice of Finance, Yale School of Management Chairman and CIO, Zebra Capital Management, LLC Founder, Ibbotson Associates\u003c\/p\u003e\u003cp\u003e“\u003ci\u003eInvestment Banking\u003c\/i\u003e provides fresh insight and perspective to valuation analysis, the basis for every great trade and winning deal on Wall Street. The book is written from the perspective of practitioners, setting it apart from other texts.”\u003cbr\u003e—\u003cb\u003eGregory Zuckerman,\u003c\/b\u003e Special Writer, \u003ci\u003eThe Wall Street Journal\u003c\/i\u003e Author, \u003ci\u003eThe Greatest Trade Ever, The Frackers,\u003c\/i\u003e and \u003ci\u003eThe Man Who Solved the Market\u003c\/i\u003e\u003c\/p\u003e\u003cp\u003eAlso available from the authors:\u003cbr\u003e\u003cb\u003e\u003ci\u003eInvestment Banking WORKBOOK\u003cbr\u003eInvestment Banking FOCUS NOTES\u003cbr\u003eInvestment Banking ONLINE COURSE\u003c\/i\u003e\u003c\/b\u003e\u003cbr\u003ewww.efficientlearning.com\/investment-banking\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989474525413,"sku":"NP9781119823377","price":100.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119823377.jpg?v=1761784246","url":"https:\/\/k12savings.com\/es\/products\/investment-banking-isbn-9781119823377","provider":"K12savings","version":"1.0","type":"link"}