Mergers, Acquisitions, Divestitures, and Other Restructurings: + Website

Praise for Mergers, Acquisitions, Divestitures, and Other Restructurings

"Mergers, Acquisitions, Divestitures, and Other Restructurings is an excellent follow–up to Pignataro′s previous books on valuation and leveraged buyouts. This book serves as a fantastic primer for those looking to understand the practical application of investment banking."
Fred Coulson, Founder and Managing Partner, Five Elms Capital

"I have had the pleasure to work with Paul′s graduate students over many years, all of whom learned from the materials which now comprise this book. Paul′s students have become some of the best analysts on Wall Street, and I am happy to see his material published so it can be accessed by a wider audience eager to learn the fine art and science of M&A, divestiture, and restructuring analysis."
Julio Marquez, Adjunct Professor, New York School of Finance, and President, Nymex Capital, New York, NY

"Mergers, Acquisitions, Divestitures, and Other Restructurings is a natural follow–up to Mr. Pignataro′s first book serving investment banking professionals and business students looking to get into the field. As a founder of a leading investment banking, private equity, and hedge fund recruiting business, and as the former head of the analyst and associate programs at Morgan Stanley, I know the importance of demonstrated proficiency in financial modeling and valuation both during the hiring process and on the job. Mr. Pignataro′s book serves as an excellent guide, stepping through the model building process in complete detail with methodologies critical to both budding analysts and experienced professionals."
Eleni Henkel, CEO & Founder at HSP | Henkel Search Partners; former Managing Director and Global Head of Morgan Stanley′s Analyst and Associate Programs

"Paul Pignataro′s exploration of the mergers, acquisitions, and restructuring world drives the reader in the meanders of this complex world where financing, accounting, legal, and valuation sometimes create the impression of a labyrinth. By identifying these challenges, Paul provides a path to a better understanding of these subtle interactions. His experience of the complexity of these transactions makes him a particularly expert guide to those who want to get an in–depth understanding of the most complex financial transactions."
Georges Ugeux, Chairman and CEO, Galileo Global Advisors LLC

"Mergers, Acquisitions, Divestitures, and Other Restructurings provides an indispensable, detailed ′how to′ reference for the broad scope of restructuring strategies and techniques that corporations draw upon to achieve growth and profitability goals and objectives."
Charles H. McGill, Adjunct Professor of Finance, NYU Stern School of Business

Preface

Part One: Introduction

CHAPTER 1: Merger and Acquisitions Overview

The M&A Process

Office Depot and Office Max

CHAPTER 2: Financial Statements Refresher

The Income Statement

Revenue

Cost of Goods Sold

Operating Expenses

Other Income

Depreciation and Amortization

Interest

Taxes

Nonrecurring and Extraordinary Items

Distributions

Shares

The Cash Flow Statement

Cash Flow from Operating Activities

Cash Flow From Investing Activities

Cash Flow from Financing Activities

The Balance Sheet

Assets

Liabilities

Depreciation

Straight–Line Depreciation

Accelerated Depreciation

Deferred Taxes

Working Capital

Debt Schedule

Financial Statement Flows Example

Part Two: M&A Analyses

CHAPTER 3: Raising Debt and Equity

Raising Debt

Raising Equity

CHAPTER 4: Asset Acquisitions and Asset Divestitures

Asset Acquisition

Stock Acquisition

338(h)(10) Elections

CHAPTER 5: Accretion / Dilution Analysis

Step 1: Obtaining a Purchase Price

Step 2: Estimating Sources and Uses of Funds

Step 3: Creating a Pro–forma Analysis

Summary

Drivers

Part Three: Office Depot / Office Max Merger

CHAPTER 6: Assumptions

Uses of Funds

Sources of Funds

CHAPTER 7: Income Statement

Pro–Forma Income Statement

CHAPTER 8: Cash Flow Statement

Cash Flow from Operating Activities

CHAPTER 9: Balance Sheet Adjustments

The Buyer is Paying For

The Buyer is Receiving

Goodwill

Office Depot and Office Max Balance Sheet Adjustments

CHAPTER 10: Depreciation Schedule

CHAPTER 11: Operating Working Capital

Projecting Operating Working Capital

Operating Working Capital and the Cash Flow Statement

CHAPTER 12: Balance Sheet Projections

Cash Flow Drives Balance Sheet Versus Balance Sheet Drives Cash Flow

Balancing an Unbalanced Balance Sheet

CHAPTER 13: Debt Schedule and Circular References

Debt Schedule Structure

Modeling the Debt Schedule

Circular References

Automatic Debt Pay–Downs

Basic Switches

CHAPTER 14: Accretion / Dilution

Fairness Opinions

Preferred Shares

Finalizing the Model

Conclusion

Summary

Drivers

Appendixes

Appendix 1: Model Quick Steps

Appendix 2: Financial Statement Flows

Appendix 3: Excel Hotkeys

About the Companion Website

About the Author

Index

PAUL PIGNATARO is the founder and CEO of the New York School of Finance (NYSF). He has over thirteen years of experience in investment banking and private equity in business mergers, acquisitions, restructurings, asset divestitures, asset acquisitions, and debt and equity transactions covering the oil, gas, power and utility, internet and technology, real estate, defense, travel, banking, and service industries. At NYSF, Mr. Pignataro continues to participate on the training team, actively providing training at bulge bracket banks and M&A teams at corporations and billion dollar funds. Prior to his entrepreneurial endeavors, Mr. Pignataro worked at TH Lee Putnam Ventures, a $1 billion private equity firm affiliated with buyout giant Thomas H. Lee Partners. Prior to that, he worked in the Investment Banking department of Morgan Stanley.