Andrew Barnett Explains Entrepreneurs About Merger And Acquisition Valuation Methods
Andrew Barnett is a renowned professional in Florida. He is a successful innovator who has worked with the Institute for Strategic Leadership Studies as a coach, trainer, and facilitator. Later, Andrew Barnett laid the foundation of the Andrew Barnett Mergers and Acquisitions Company in Fort Lauderdale.
This company provides the following services to the company:
- Merger Planning
- Formulation Of The Deal
- Merger Execution, and
- Due Diligence
To know more about the company, visit their on Tumblr page.
What are Merger and Acquisitions?
- Mergers and acquisitions are generally used as a collective term but they represent two different kinds of transactions:
- A merger is defined as the grouping of two companies in one business entity. For example, Exxon and Mobil merged to form Exxon Mobil Corporation in 1999.
- An acquisition happens when one business is bought by another one. For example, Walt Disney Company brought Marvel Entertainment in 2009 and Pixar Studios in 2006.
Following synergies can be achieved via a Merger and Acquisition transaction:
- Revenue collaborations
- Operational collaborations
- Cost or Revenue collaborations
- Financial collaborations
- Cost or Operational collaborations
Merger analysis comprises using models for the analysis of the fiscal profile of a union after the combination of two firms. Its main objective is to determine whether the earnings per share of the buyer decrease (dilution) or increase (accretion).
Analysis of dilution/accretion and its impact on the balance sheet
- Analysis of collaborations
- Type of consideration offered
- Balance sheet adjustments
- Transaction costs
The target seller could be:
- Private or public company
- Percentage of publicly held stock vs. insider ownership
The target buyer could be:
- Strategic buyer
- Financial sponsor
The transaction context is:
- Privately negotiated sale or Auction,
- The hostile or friendly takeover
The market conditions are described as:
- Acquisition currency (equity or cash)
- Historic premiums remunerated for similar transactions
Types of M&A
Merger and acquisition transactions take place in the following ways:
- Horizontal Merger
- Vertical Merger
- Conglomerate M&A
- Friendly Takeover
- Hostile Takeover
- Reverse Takeover
This is the next step performed in a merger and acquisition. Both organizations collect due diligence information to prepare an agreement. This step comprises the different agreement levels that may occur during the progression of the contract. These include:
- Letter of Intent, and
- Definitive Purchase Agreement
Statistics show that a thousand Merger and Acquisitions are performed every year. The right assistance of an M&A company helps in the best determination of merger and acquisition valuation methods.