{"product_id":"valuation-for-m-a-isbn-9781119433835","title":"Valuation for M\u0026A","description":"\u003cp\u003e\u003cb\u003eDetermine a company's value, what drives it, and how to enhance value during a M\u0026amp;A\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003ci\u003eValuation for M\u0026amp;A\u003c\/i\u003e lays out the steps for measuring and managing value creation in non-publicly traded entities, and helps investors, executives, and their advisors determine the optimum strategy to enhance both market value and strategic value and maximize return on investment.\u003c\/p\u003e \u003cp\u003eAs a starting point in planning for a transaction, it is helpful to compute fair market value, which represents a “floor” value for the seller since it by definition represents a value agreed upon by any hypothetical willing and able buyer and seller.  But for M\u0026amp;A, it is more important to compute investment value, which is the value of the target company to a strategic buyer (and which can vary with each prospective buyer). \u003c\/p\u003e \u003cul\u003e \u003cli\u003ePrepare for the sale and acquisition of a firm\u003c\/li\u003e \u003cli\u003eIdentify, quantify, and qualify the synergies that increase value to strategic buyers\u003c\/li\u003e \u003cli\u003eGet access to new chapters on fairness opinions and professional service firms\u003c\/li\u003e \u003cli\u003eFind a discussion of Roger Grabowski's writings on cost of capital, cross-border M\u0026amp;A, private cost of capital, intangible capital, and asset vs. stock transactions\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003eInside, all the necessary tools you need to build and measure private company value is just a page away! \u003c\/p\u003e \u003cp\u003e\u003ci\u003ePreface xi\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\u003ci\u003eDedication and Acknowledgments xv\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART I Introduction 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 1\u003c\/b\u003e \u003cb\u003eWinning through Mergers and Acquisitions 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCritical Values Shareholders Overlook 5\u003c\/p\u003e \u003cp\u003eStand-Alone Fair Market Value 6\u003c\/p\u003e \u003cp\u003eInvestment Value to Strategic Buyers 8\u003c\/p\u003e \u003cp\u003eWin–Win Benefits of Merger and Acquisition 10\u003c\/p\u003e \u003cp\u003eComputation of Cavendish’s Stand-Alone, Fair Market Value 11\u003c\/p\u003e \u003cp\u003eInvestment Value to Strategic Buyer 12\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART II Building Value 15\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 2 Building Value and Measuring Return on Investment in a Private Company 17\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003ePublic Company Value Creation Model 17\u003c\/p\u003e \u003cp\u003eComputing Private Company Value Creation and ROI 19\u003c\/p\u003e \u003cp\u003eAnalyzing Value Creation Strategies 35\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 3 Market and Competitive Analysis 41\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eLinking Strategic Planning to Building Value 43\u003c\/p\u003e \u003cp\u003eAssessing Specific Company Risk 48\u003c\/p\u003e \u003cp\u003eCompetitive Factors Frequently Encountered in Nonpublic Entities 53\u003c\/p\u003e \u003cp\u003eFinancial Analysis 54\u003c\/p\u003e \u003cp\u003eConclusion 59\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 4\u003c\/b\u003e \u003cb\u003eMerger and Acquisition Market and Planning Process 61\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCommon Seller and Buyer Motivations 64\u003c\/p\u003e \u003cp\u003eWhy Mergers and Acquisitions Fail 65\u003c\/p\u003e \u003cp\u003eSales Strategy and Process 67\u003c\/p\u003e \u003cp\u003eAcquisition Strategy and Process 78\u003c\/p\u003e \u003cp\u003eDue Diligence Preparation 86\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 5 Measuring Synergies 91\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eSynergy Measurement Process 92\u003c\/p\u003e \u003cp\u003eKey Variables in Assessing Synergies 95\u003c\/p\u003e \u003cp\u003eSynergy and Advance Planning 96\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART III Measuring Value 99\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 6\u003c\/b\u003e \u003cb\u003eValuation Approaches and Fundamentals 101\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBusiness Valuation Approaches 101\u003c\/p\u003e \u003cp\u003eUsing the Invested Capital Model to Define the Investment Being Appraised 103\u003c\/p\u003e \u003cp\u003eWhy Net Cash Flow Measures Value Most Accurately 104\u003c\/p\u003e \u003cp\u003eFrequent Need to Negotiate from Earnings Measures 106\u003c\/p\u003e \u003cp\u003eFinancial Statement Adjustments 109\u003c\/p\u003e \u003cp\u003eManaging Investment Risk in Merger and Acquisition 112\u003c\/p\u003e \u003cp\u003eConclusion 117\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 7 Income Approach: Using Expected Future Returns to Establish Value 119\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Values for Merger and Acquisition Should Be Driven by the Income Approach 119\u003c\/p\u003e \u003cp\u003eTwo Methods within the Income Approach 121\u003c\/p\u003e \u003cp\u003eThree-Stage DCF Model 128\u003c\/p\u003e \u003cp\u003eEstablishing Defendable Long-Term Growth Rates and Terminal Values 131\u003c\/p\u003e \u003cp\u003eDCF Challenges and Applications 133\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 8 Cost of Capital Essentials 135\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCost of Debt Capital 136\u003c\/p\u003e \u003cp\u003eCost of Preferred Stock 138\u003c\/p\u003e \u003cp\u003eCost of Common Stock 138\u003c\/p\u003e \u003cp\u003eFundamentals and Limitations of the Capital Asset Pricing Model 139\u003c\/p\u003e \u003cp\u003eModified Capital Asset Pricing Model 142\u003c\/p\u003e \u003cp\u003eBuild-Up Model 143\u003c\/p\u003e \u003cp\u003eSummary of Rate of Return Data 151\u003c\/p\u003e \u003cp\u003ePrivate Cost of Capital 153\u003c\/p\u003e \u003cp\u003eInternational Cost of Capital 156\u003c\/p\u003e \u003cp\u003eHow to Develop an Equity Cost for a Target Company 157\u003c\/p\u003e \u003cp\u003eReconciling Discount Rates and P\/E Multiples 159\u003c\/p\u003e \u003cp\u003eConclusion 161\u003c\/p\u003e \u003cp\u003eAppendix 8A Using Specific Company Risk Strategically 162\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 9 Weighted Average Cost of Capital 169\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eIterative Weighted Average Cost of Capital Process 170\u003c\/p\u003e \u003cp\u003eShortcut Weighted Average Cost of Capital Formula 174\u003c\/p\u003e \u003cp\u003eCommon Errors in Computing Cost of Capital 176\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 10 Market Approach: Using Guideline Public Companies and M\u0026amp;A Transactions 181\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eTransaction Multiple Method 182\u003c\/p\u003e \u003cp\u003eGuideline Public Company Method 186\u003c\/p\u003e \u003cp\u003eSelection of Valuation Multiples 190\u003c\/p\u003e \u003cp\u003eCommonly Used Market Multiples 191\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 11 Asset Approach 199\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eBook Value versus Market Value 200\u003c\/p\u003e \u003cp\u003ePremises of Value 201\u003c\/p\u003e \u003cp\u003eUse of the Asset Approach to Value Noncontrolling Interests 201\u003c\/p\u003e \u003cp\u003eAdjusted Book Value Method 202\u003c\/p\u003e \u003cp\u003eSpecific Steps in Computing Adjusted Book Value 207\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 12 Adjusting Value through Premiums and Discounts 209\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eApplicability of Premiums and Discounts 210\u003c\/p\u003e \u003cp\u003eApplication and Derivation of Premiums and Discounts 211\u003c\/p\u003e \u003cp\u003eApply Discretion in the Size of the Adjustment 213\u003c\/p\u003e \u003cp\u003eControl versus Lack of Control in Income-Driven Methods 215\u003c\/p\u003e \u003cp\u003eFair Market Value versus Investment Value 215\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 13 Reconciling Initial Value Estimates and Determining Value Conclusion 217\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eEssential Need for Broad Perspective 217\u003c\/p\u003e \u003cp\u003eIncome Approach Review 220\u003c\/p\u003e \u003cp\u003eMarket Approach Review 225\u003c\/p\u003e \u003cp\u003eAsset Approach Review 226\u003c\/p\u003e \u003cp\u003eValue Reconciliation and Conclusion 228\u003c\/p\u003e \u003cp\u003eChecks to Value 231\u003c\/p\u003e \u003cp\u003eCandidly Assess Valuation Capabilities 232\u003c\/p\u003e \u003cp\u003eValuation Scenarios – Platform for M\u0026amp;A 232\u003c\/p\u003e \u003cp\u003eAppendix 13A Disciplined and Thorough Valuation Analysis Key to Avoiding Failed M\u0026amp;A Deals 235\u003c\/p\u003e \u003cp\u003eAnalysis of a Hypothetical Synergistic Deal 235\u003c\/p\u003e \u003cp\u003eEstablishing the Value of an Acquisition Target 236\u003c\/p\u003e \u003cp\u003eEstablishing Value for the Acquirer 238\u003c\/p\u003e \u003cp\u003eConsiderations of Other Impacts on Value 239\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART IV Specialty Issues 241\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 14 Exit Planning 243\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Is Exit Planning So Difficult? 244\u003c\/p\u003e \u003cp\u003eWhat Makes Planning for Your Private Company Investment Unique? 247\u003c\/p\u003e \u003cp\u003eWhy Should Exit Planning for Your Private Company Begin Now? 249\u003c\/p\u003e \u003cp\u003eExit Planning Process 250\u003c\/p\u003e \u003cp\u003eStep 1: Setting Exit Goals 252\u003c\/p\u003e \u003cp\u003eStep 2: Owner Readiness 254\u003c\/p\u003e \u003cp\u003eStep 3: Type of Exiting Owner 256\u003c\/p\u003e \u003cp\u003eStep 4: Exit Options 258\u003c\/p\u003e \u003cp\u003eStep 5: Range of Values 263\u003c\/p\u003e \u003cp\u003eStep 6: Execution of Exit Plan 265\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 15 Art of the Deal 269\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eUnique Negotiation Challenges 269\u003c\/p\u003e \u003cp\u003eDeal Structure: Stock versus Assets 271\u003c\/p\u003e \u003cp\u003eAsset Transaction 276\u003c\/p\u003e \u003cp\u003eTerms of Sale: Cash versus Stock 279\u003c\/p\u003e \u003cp\u003ePersonal Goodwill 282\u003c\/p\u003e \u003cp\u003eBridging the Gap 283\u003c\/p\u003e \u003cp\u003eSee the Deal from the Other Side 286\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 16\u003c\/b\u003e \u003cb\u003eFairness Opinions 289\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Are Fairness Opinions Obtained? 291\u003c\/p\u003e \u003cp\u003eThe Use of Fairness Opinions by Private Companies 294\u003c\/p\u003e \u003cp\u003eParties Who Prepare Fairness Opinions 295\u003c\/p\u003e \u003cp\u003eComponents of a Fairness Opinion 297\u003c\/p\u003e \u003cp\u003eWhat Fairness Opinions Are Not 301\u003c\/p\u003e \u003cp\u003eConclusion 302\u003c\/p\u003e \u003cp\u003eAppendix 16A Sample Fairness Opinion Letter 303\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 17 M\u0026amp;A and Financial Reporting 309\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eU.S. GAAP and IFRS 310\u003c\/p\u003e \u003cp\u003eRelevant FASB and IFRS Statements 311\u003c\/p\u003e \u003cp\u003eReviews by the Audit Firm 312\u003c\/p\u003e \u003cp\u003eASC 820: Fair Value Measurements 313\u003c\/p\u003e \u003cp\u003eASC 805: Business Combinations 315\u003c\/p\u003e \u003cp\u003eASC 350: Goodwill and Other Intangible Assets 325\u003c\/p\u003e \u003cp\u003eIncorporating ASC 805 into the Due Diligence Process 326\u003c\/p\u003e \u003cp\u003eReferences 329\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 18 Intangible Asset Valuation 331\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eApproaches to Valuing Intangible Assets 332\u003c\/p\u003e \u003cp\u003eKey Components to Intangible Asset Valuation 334\u003c\/p\u003e \u003cp\u003eIntangible Asset Valuation Methods 343\u003c\/p\u003e \u003cp\u003eConclusion 352\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 19 Measuring and Managing Value in High-Tech Start-Ups 353\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eWhy Appraisals of High-Tech Start-Ups Are Essential 353\u003c\/p\u003e \u003cp\u003eKey Differences in High-Tech Start-Ups 355\u003c\/p\u003e \u003cp\u003eValue Management Begins with Competitive Analysis 356\u003c\/p\u003e \u003cp\u003eStages of Development 358\u003c\/p\u003e \u003cp\u003eRisk and Discount Rates 360\u003c\/p\u003e \u003cp\u003eStart-Ups and Traditional Valuation Methods 361\u003c\/p\u003e \u003cp\u003eQED Survey of Valuation Methods Used by Venture Capitalists 367\u003c\/p\u003e \u003cp\u003eA Probability-Weighted Scenario Method to Value Start-Ups 372\u003c\/p\u003e \u003cp\u003eEquity Allocation Methods 377\u003c\/p\u003e \u003cp\u003eConclusion 380\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 20\u003c\/b\u003e \u003cb\u003eCross-Border M\u0026amp;A 381\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eStrategic Buy-Side Considerations 381\u003c\/p\u003e \u003cp\u003eDue Diligence 390\u003c\/p\u003e \u003cp\u003eSell-Side Considerations 395\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART V Case Studies 397\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 21\u003c\/b\u003e \u003cb\u003eMerger and Acquisition Valuation Case Study – Distribution Company 399\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eHistory and Competitive Conditions 400\u003c\/p\u003e \u003cp\u003ePotential Buyers 401\u003c\/p\u003e \u003cp\u003eGeneral Economic Conditions 402\u003c\/p\u003e \u003cp\u003eSpecific Industry Conditions 403\u003c\/p\u003e \u003cp\u003eGrowth 404\u003c\/p\u003e \u003cp\u003eComputation of the Stand-Alone Fair Market Value 404\u003c\/p\u003e \u003cp\u003eRisk and Value Drivers 409\u003c\/p\u003e \u003cp\u003eSummary and Conclusion of Stand-Alone Fair Market Value 418\u003c\/p\u003e \u003cp\u003eComputation of Investment Value 420\u003c\/p\u003e \u003cp\u003eSuggested Considerations to Case Conclusion 427\u003c\/p\u003e \u003cp\u003e\u003cb\u003eChapter 22 Merger and Acquisition Valuation Case Study –Professional Services Firm 429\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCharacteristics 429\u003c\/p\u003e \u003cp\u003eValuation Methods 433\u003c\/p\u003e \u003cp\u003eCase Study Introduction 435\u003c\/p\u003e \u003cp\u003ePotential Buyer 435\u003c\/p\u003e \u003cp\u003eHistoric Financial Performance 436\u003c\/p\u003e \u003cp\u003eFuture Expectations 439\u003c\/p\u003e \u003cp\u003eRisk and Value Drivers 443\u003c\/p\u003e \u003cp\u003eDiscounted Cash Flow Method 445\u003c\/p\u003e \u003cp\u003eOther Valuation Methods to Consider 445\u003c\/p\u003e \u003cp\u003eSuggested Considerations to Case Conclusion 451\u003c\/p\u003e \u003cp\u003e\u003ci\u003eAbout the Authors 453\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\u003ci\u003eGlossary 455\u003c\/i\u003e\u003c\/p\u003e \u003cp\u003e\u003ci\u003eIndex 465\u003c\/i\u003e\u003c\/p\u003e   \u003cp\u003e\u003cb\u003eCHRIS M. MELLEN\u003c\/b\u003e is a managing director with Valuation Research Corporation who leads its Boston office. Previously, he was president of Delphi Valuation Advisors, Inc., which he founded in 2000 and sold to VRC in 2015. Mellen is the author of numerous articles on valuation-related topics and coauthor of the second edition and author of the third edition of \u003ci\u003eValuation for M\u0026amp;A.\u003c\/i\u003e \u003c\/p\u003e\u003cp\u003e\u003cb\u003eFRANK C. EVANS\u003c\/b\u003e is the founder of Evans and Associates Valuation Advisory Services. A prolific educator and speaker, he is coauthor of the first and second editions of \u003ci\u003eValuation for M\u0026amp;A\u003c\/i\u003e.  \u003c\/p\u003e\u003cp\u003eA business must measure its value potential in order to grow and succeed. Companies that trade on a stock exchange can easily see their market value day to day, but private companies are far more challenged in gauging their value, which further complicates the tricky negotiations involved in mergers and acquisitions (M\u0026amp;A). \u003ci\u003eValuation for M\u0026amp;A\u003c\/i\u003e remains the only authoritative guide on the market for executives and investors who want to know both the fair market value and investment value of a closely-held business. \u003c\/p\u003e\u003cp\u003eThis revised and expanded \u003ci\u003eThird Edition\u003c\/i\u003e presents a fully up-to-date road map to measuring value in businesses being considered for sale and purchase, as well as growing value in a company’s daily operations. New coverage brings you up to speed on all the changes in the marketplace, including how to accurately value knowledge-based assets and how to value businesses with a global perspective. \u003c\/p\u003e\u003cp\u003eThis dependable resource now features a streamlined, quick-reference format to seamlessly answer your everyday questions on:\u003c\/p\u003e\u003cul\u003e\n\u003cli\u003eNegotiating toward a win-win outcome in any M\u0026amp;A transaction—as a buyer and a seller \u003c\/li\u003e\n\u003cli\u003eBuilding company value leading up to an M\u0026amp;A transaction by conducting both quantitative and qualitative assessments \u003c\/li\u003e\n\u003cli\u003eMastering a valuation skillset specific to M\u0026amp;A, including exit planning, deal structuring, fairness opinions, and financial reporting\u003c\/li\u003e\n\u003c\/ul\u003e\u003cp\u003eThis new edition also offers fresh discussions on cost of capital, including the Duff \u0026amp; Phelps Risk Premium Report Size Study and the Private Cost of Capital. Finally, there are new contributions by Ken Sanginario on “Using Specific Company Risk Strategically” and Justin Johnson on “Disciplined and Thorough Valuation Analysis are Key to Avoiding Failed M\u0026amp;A Deals.”\u003c\/p\u003e\u003cp\u003eKnow for certain whether selling or buying a company is the right strategic move with \u003ci\u003eValuation for M\u0026amp;A, Third Edition\u003c\/i\u003e.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990444032229,"sku":"NP9781119433835","price":89.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781119433835.jpg?v=1761787852","url":"https:\/\/k12savings.com\/es\/products\/valuation-for-m-a-isbn-9781119433835","provider":"K12savings","version":"1.0","type":"link"}