investment banking valuation m a sale process

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1、P1:ABC/ABCP2:c/dQC:e/fT1:gc06JWBT063-RosenbaumMarch18,200915:38PrinterName:HamiltonCHAPTER6M&ASaleProcesshesaleofacompany,division,business,orcollectionofassets(“target”)isaTmajoreventforitsowners(shareholders),management,employees,andotherstakeholders.Itisanintense,time-consumingprocesswithhig

2、hstakes,usuallyspan-ningseveralmonths.Consequently,thesellertypicallyhiresaninvestmentbankanditsteamoftrainedprofessionals(“sell-sideadvisor”)toensurethatkeyobjectivesaremetandafavorableresultisachieved.Inmanycases,asellerturnstoitsbankersforacomprehensivefinancialanalysisofthevariousstrategical

3、ternativesavailabletothetarget.Theseincludeasaleofallorpartofthebusiness,arecapitalization,aninitialpublicoffering,oracontinuationofthestatusquo.Oncethedecisiontosellhasbeenmade,thesell-sideadvisorseekstoachievetheoptimalmixofvaluemaximization,speedofexecution,andcertaintyofcompletionamongother

4、deal-specificconsiderationsforthesellingparty.Accordingly,itisthesell-sideadvisor’sresponsibilitytoidentifytheseller’sprioritiesfromtheonsetandcraftatailoredsaleprocess.Ifthesellerisrelativelyindifferenttowardconfidentiality,timing,andpotentialbusinessdisruption,theadvisormayconsiderrunningabroad

5、auctionreachingouttoasmanypotentialinterestedpartiesasreasonablypossible.Thisprocess,whichisrelativelyneutraltowardprospectivebuyers,isdesignedtomaximizecompetitivedynamicsandheightentheprobabilityoffindingtheonebuyerwillingtoofferthebestvalue.Alternatively,ifspeed,confidentiality,aparticulartran

6、sactionstructure,and/orculturalfitareapriorityfortheseller,thenatargetedauction,whereonlyaselectgroupofpotentialbuyersareapproached,orevenanegotiatedsalewithasingleparty,maybemoreappropriate.Generally,anauctionrequiresmoreupfrontor-ganization,marketing,processpoints,andresourcesthananegotiatedsa

7、lewithasingleparty.Consequently,thischapterfocusesprimarilyontheauctionprocess.Fromananalyticalperspective,asell-sideassignmentrequiresthedealteamtoperformacomprehensivevaluationofthetargetusingthosemethodologiesdiscussedinthisboo