M & AM & A

Opportunity for

Merger & Acquisition?

Opportunity for

Merger & Acquisition?

Financial Crisis of 2009Financial Crisis of 2009

1. Synergy

2. Economics of Scale – Horizontal Mergers

3. Entry to New Market

4. Tax Advantages

5. Diversification

Rationale Behind M&ARationale Behind M&A

1. Asset Acquisition

Definition…………………….

2. Share Acquisition

Definition…………………….

Acquisition MethodsAcquisition Methods

1. Amalgamation

( A + B = C )

2. Total Asset Transfer

( A + B = A )

Merger Method Merger Method

1. Buyer search

2. Confidentiality agreement

3. Information memorandum

4. Buyer meeting with management

5. Indicative offer

6. Structuring and negotiation

7. Due diligence

8. Sale and Purchase agreement

Acquisition ProcessAcquisition Process

1. Commercial Due Diligence

Market Characteristics and trend

Customers Profile

Business model

SWOT Analysis

Type of Due DiligenceType of Due Diligence

2. Financial Due Diligence

Past Performance assurance

Business System

Financial Projection

Valuation

Tax

Types of Due DiligenceTypes of Due Diligence

3. Legal Due Diligence

Contracts

Licenses and Permits

Litigation

Ownership document

Labor law

Corporate document

Types of Due DiligenceTypes of Due Diligence

1. Earning based valuation

(DCF, Capitalized earning method)

2. Market based valuation

(Market Capitalization, Market Comparable)

3. Assets based valuation

(Net assets value, Intangible value, Liquidation value)

Valuation TechniquesValuation Techniques