Master the art of financial restructuring and corporate actions to transform businesses and drive value!
What you will learn
The fundamentals of financial restructuring, including management buyouts (MBOs) and leveraged buyouts (LBOs).
The step-by-step process of executing a management buyout, including valuation, funding, and structuring deals.
How to identify, evaluate, and manage financial distress, and the techniques for restructuring a business in bankruptcy.
In-depth analysis of mergers and acquisitions (M&A), including funding, valuation methods, and the impact on company earnings.
The role of corporate actions and their life cycle, including mandatory and voluntary corporate actions like share splits and buybacks.
Key financial metrics and models, such as the Z-Score model for bankruptcy prediction and the Rule of 72 for investment growth.
Advanced capital structure management, including the effects of leverage and recapitalization strategies.
The legal and strategic implications of mergers, acquisitions, and takeovers, and the defense mechanisms companies employ.
Case studies on major corporate transactions, such as the HP and Compaq merger, to understand real-world applications.
Global corporate restructuring practices, with insights into international examples from the UK, Canada, and East Asia.
Why take this course?
This comprehensive course on Financial Restructuring and Corporate Actions provides in-depth insights into the mechanisms and strategies that drive corporate transformations, buyouts, mergers, and acquisitions. Whether it’s understanding the intricacies of management buyouts or evaluating financial distress situations, this course is designed to equip learners with both theoretical knowledge and practical skills. By the end of the course, students will be well-versed in various corporate restructuring techniques, their financial implications, and how to navigate the complex landscape of mergers, acquisitions, and corporate finance.
Section 1: Introduction
The course begins by introducing the foundational concepts of financial restructuring, including its importance in maintaining the financial health of corporations. The lectures cover the basics of corporate action, providing a clear overview of how financial decisions can reshape the structure of an organization.
Section 2: Management Buyout (MBO)
In this section, students will dive into the management buyout (MBO) process. They will learn about different types of buyouts, the structure and funding of MBOs, and the criteria for a successful buyout. Key areas include identifying suitable investors, valuing a business, calculating acquisition prices, and understanding various types of finance options available for MBOs. Real-world examples will be presented to demonstrate the numerical calculations behind MBOs and the financial benefits they can offer to both managers and investors.
Section 3: Bankruptcy, Liquidation, and Restructuring
This section tackles the difficult but crucial topics of bankruptcy and liquidation. Students will explore concepts such as financial distress, insolvency, and the steps involved in filing for bankruptcy. The course delves into liquidation processes, including numerical calculations and the use of models like the Z-score to predict bankruptcy. Learners will also analyze the legal framework surrounding bankruptcy, understanding concepts such as the absolute priority rule and flow-based insolvency.
Section 4: Funding Mergers and Acquisitions (M&A)
Here, students will study the key financial aspects of mergers and acquisitions, focusing on different methods of payment, stock swaps, share exchange ratios, and the effects on earnings per share (EPS). The section also explores various financing decisions and how external commercial borrowings impact mergers and acquisitions, giving students a complete understanding of the financial mechanisms involved in corporate consolidation.
Section 5: Case Study – HP and Compaq Merger
This section uses the HP and Compaq merger as a case study to illustrate the practical application of M&A concepts. Students will analyze outstanding shares, tax implications for shareholders, and the market’s reaction to stock payment options. The lectures will cover the impact of cash payments on capital structures and provide valuable lessons on handling large-scale corporate mergers.
Section 6: Leveraged Recapitalization
Leveraged recapitalization is a financial strategy where a company restructures its balance sheet to increase debt and reduce equity. In this section, students will explore different forms of leveraged recapitalization, including share repurchases and leveraged buyouts. Through diagrams and case studies (e.g., Sealed Air Corporation), learners will gain a clear understanding of how these techniques are employed to restructure companies and enhance shareholder value.
Section 7: Mergers and Acquisitions (M&A)
In this section, students will explore deeper concepts of M&A. Key topics include horizontal and vertical mergers, characteristics of conglomerate mergers, and understanding bootstrap earnings. Various examples will illustrate how companies create synergy and value through mergers, highlighting the role of competition metrics such as the Herfindahl-Hirschman Index.
Section 8: Cash Flow and Comparable Company Analysis
Understanding the importance of free cash flow and analyzing comparable companies is key to valuation in mergers and acquisitions. Students will learn how to calculate and interpret negative cash flow, as well as conduct a comparable company analysis (CCA) to identify acquisition opportunities and their associated costs.
Section 9: Goodwill and Acquisitions
Here, students will delve into the concept of goodwill in the context of acquisitions. They will learn how to calculate goodwill, examine divestitures, and understand the tax implications of acquisitions. This section provides an essential overview of the accounting and valuation techniques necessary for successful corporate takeovers.
Section 10: Corporate Charter Transactions
This section covers corporate charter transactions, including comparable transaction analysis and the key legal and strategic defense mechanisms employed during takeovers. The lectures will also touch on pre- and post-offer takeover defenses, helping students understand how companies protect themselves during hostile acquisition attempts.
Section 11: Synergy and Its Benefits
Synergy is one of the primary motivations behind mergers and acquisitions. This section focuses on how synergy is generated in mergers and its potential benefits, such as reductions in capital needs, acquisition of valuable assets, and increased shareholder value. Real-life examples will illustrate the practical applications of these concepts.
Section 12: Types of Corporate Restructuring
Students will explore various types of corporate restructuring, both financial and operational. Through examples from East Asian markets, the section will provide a global perspective on corporate restructuring and its relevance in different economic contexts.
Section 13: Securing Asset Lenders
In this section, students will learn about asset-based lending and the importance of securing financing through mezzanine and subordinated debt. Organic and inorganic growth strategies will also be discussed in the context of securing business capital.
Section 14: Corporate Restructuring and Control
The focus of this section is on corporate control and decision-making during corporate restructuring. Students will explore the various choices a company faces when undergoing significant changes in its capital structure and control mechanisms.
Section 15: International Findings
This final section provides a global perspective on financial restructuring through examples from the UK, Canada, and other international markets. The lectures will help students understand how strategic alternatives are explored in different financial environments and legal frameworks.
Conclusion:
This course equips learners with a robust understanding of financial restructuring, mergers and acquisitions, corporate actions, and leveraged recapitalization. By the end, students will be able to analyze complex corporate transactions, understand various financial structures, and navigate the dynamic world of corporate finance with confidence.