Investment Banking: M&A and Initial Public Offerings

University of Illinois at Urbana-Champaign via Coursera

Go to Course: https://www.coursera.org/learn/investment-banking-mergers-acquisitions-ipos

Introduction

### Course Review: Investment Banking: M&A and Initial Public Offerings on Coursera The world of finance is dynamic and complex, marked by transactions that often determine the fate of corporations and economies alike. For those aspiring to carve out a career in investment banking or simply wanting to understand the nuances of Mergers and Acquisitions (M&A) and Initial Public Offerings (IPOs), Coursera offers a highly informative and practical course titled "Investment Banking: M&A and Initial Public Offerings." #### Course Overview This course delves into the essential financial analysis and valuation techniques that are hallmarks of the investment banking profession. Designed both for novices and those with some background in finance, the course explores the intricacies of M&A transactions, the mechanisms of leveraged buyouts (LBOs), and the foundational principles behind taking a company public. This course is perfect for anyone looking to deepen their understanding of the financial landscape, specifically those involved in corporate finance, investment banking, or asset management. #### Syllabus Breakdown **Module 1: Introduction to Mergers and Acquisitions** The initial module lays a solid groundwork, describing various types of M&A projects and the significant role of investment banks in such transactions. The emphasis is placed on the motivations and strategies behind M&A, how businesses are sold, and the sell-side auction process. This module serves as an informative entry point into the world of M&A, making it ideal for learners who may be unfamiliar with these concepts. **Module 2: Leveraged Buyout Analysis** This module emphasizes the predominant role of private equity, particularly the structure and pricing of leveraged buyouts. Here, students gain practical knowledge about how firms evaluate potential investments and assess the finance that goes into an LBO. The focus on assumed return thresholds and capital structures provides learners with a robust understanding of financial decision-making in high-stakes transactions. **Module 3: Merger Consequences Analysis** Understanding the real impact of an acquisition on a company's earnings per share (EPS) is crucial, and Module 3 digs deep into this analysis. Through simulations and examples, students learn how to determine the accretive or dilutive impact on EPS based on the target company’s valuation and expected synergies. This critical module not only teaches about transaction evaluation but also incorporates financial modeling skills, critical for any investment banking professional. **Module 4: Overview of Initial Public Offerings (IPOs)** The final academic segment explores the IPO process, outlining how businesses transition from private to public entities. By drawing parallels with the M&A process and dissecting key IPO terms and stages, this module gives a comprehensive look at what it means to go public. It emphasizes valuation considerations and the strategic elements behind deciding to pursue an IPO versus an outright sale. #### Conclusion The "Investment Banking: M&A and Initial Public Offerings" course is exceptionally structured, blending theoretical knowledge with practical applications. Each module builds upon the last, gradually developing a learner's understanding and skillset. The course is delivered through engaging video lectures, supplemented by real-world case studies that provide context and relevance. #### Recommendation I highly recommend this course to anyone interested in pursuing a career in investment banking, finance, or corporate management. Whether you're a student looking to build a robust foundation or a professional aiming to refine your skills, this course offers valuable insights that will prove advantageous in the ever-evolving financial landscape. With its comprehensive approach and practical focus, it's an investment in your career that will pay dividends in knowledge and competence. In summary, if you want to navigate the complexities of M&A and IPOs with confidence, enrolling in this course is a step in the right direction!

Syllabus

Course Introduction and Module 1: Introduction to Mergers and Acquisitions

This module begins with describing the different types of M&A projects and roles investment banks play in them. It then moves on to the motivations and strategies which drive M&A transactions, the different approaches to selling a business, and the process steps to running a sell-side auction process. Finally, the module explores how buyers finance, structure, and analyze M&A transactions.

Module 2: Leveraged Buyout Analysis

Most of the M&A deals that take place in today’s market are completed by private equity firms. The vast majority of these transactions are classified as “leveraged buyouts (LBOs)”, as the consideration is a mix of equity and debt (leverage). This module will explore how a private equity firm determines the price that it can pay for a specific target company in an LBO transaction given an assumed return threshold, financial forecast and capital structure.

Module 3: Merger Consequences Analysis

When a corporation acquires a business, in addition to assessing the target’s standalone valuation, it will also assess whether the completion of the transaction will have a positive impact on its prospective earnings per share (EPS). This module will explore how an acquirer analyzes whether the acquisition has an accretive (positive) or dilutive (negative) impact on its EPS, given assumptions of the target’s valuation, expected transaction synergies, a proposed financing structure, and the impact of both financial and accounting transaction adjustments. This module will also demonstrate how to prepare a pro forma balance sheet for the buyer given the specifics of the M&A transaction.

Module 4: Overview of Initial Public Offerings (IPOs)

Owners of businesses sometimes decide to take their business public as an alternative to an outright sale. This model explores the similarities between selling and an IPO as well as the differences. This module will define commonly used IPO terms and discuss the IPO process on a stage by stage basis. Finally, this module will highlight the key IPO valuation considerations and end with discussing what happens after a company is public.

Course Conclusion