Finance of Mergers and Acquisitions: Valuation and Pricing

Go to Course: https://www.coursera.org/learn/mergers-acquisitions-valuation-pricing

Introduction

### Course Review: Finance of Mergers and Acquisitions: Valuation and Pricing #### Overview The **Finance of Mergers and Acquisitions: Valuation and Pricing** course on Coursera is a comprehensive exploration of the critical financial principles underlying M&A transactions. Aimed at both finance professionals and students, this course delves into the intricacies of valuing and pricing M&A deals, as well as choosing the optimal financing mix. Covering various types of M&A deals—including strategic M&A, private equity leveraged buyouts (LBOs), and restructuring efforts like spinoffs—this course equips learners with both theoretical knowledge and practical insights. #### Course Structure The course is divided into four modules, each focusing on different aspects of M&A finance: 1. **Course Orientation and Module 1: Overview of M&A Topics and Evidence** This initial module lays a solid foundation by introducing key M&A terminology and concepts. Students explore the reasons behind M&A activity, the characteristics of value-enhancing drivers, and a historical perspective on mergers and acquisitions. A crucial starting point, this module sets the stage for deeper dives into M&A finance. 2. **Module 2: Company Valuation** Understanding a company’s stock price is vital for anyone involved in M&A. This module offers essential valuation techniques such as discounted cash flow valuation and multiples-based valuation. By integrating up-to-date financial theory with real-world case studies, learners can effectively grasp how to evaluate potential M&A targets. 3. **Module 3: The Role of Target and Acquirer Valuation in M&A** The valuation of both the target and acquirer is pivotal in any M&A deal. This module discusses the significance of thorough valuation analysis presented by investment banks during M&A advisories. Students learn how to approach the valuation of non-publicly traded targets and efficiently utilize transaction multiples for better insight into M&A pricing. 4. **Module 4: Synergies and Hostile Takeovers** Synergies are often what make M&A deals enticing. This module teaches students how to assess synergies through cash flow forecasts and stock market reactions, alongside the relationship between synergies and acquisition premiums. Moreover, learners are exposed to the complexities surrounding hostile takeovers, such as governance, legalities, and valuation challenges. 5. **Course Conclusion** The course wraps up with a synthesis of the knowledge learned throughout the modules and encourages students to reflect on how they can apply these lessons in their professional endeavors. #### Recommendations Overall, the **Finance of Mergers and Acquisitions: Valuation and Pricing** course is an exceptional choice for professionals looking to deepen their understanding of M&A finance. It provides a balanced mixture of theory and practical application, making it suitable for individuals from various finance backgrounds—from students aspiring to enter the corporate finance field to seasoned professionals aiming to refine their skills. **Why You Should Enroll:** - **Expert Instruction:** The course is taught by knowledgeable instructors with industry experience, ensuring that learners receive valuable insights and guidance. - **Practical Applications:** Real-world case studies enrich the learning experience, allowing students to apply theoretical knowledge to practical scenarios vital in M&A. - **Comprehensive Content:** The syllabus covers a breadth of topics critical for anyone involved in M&A, making it an ideal primer or a robust refresher on M&A valuation. - **Flexible Learning:** With the structure of online courses, you can study at your own pace while still accessing valuable resources and community discussions. In conclusion, whether you are planning to pursue a career in investment banking, corporate strategy, or private equity, this course will enhance your understanding of mergers and acquisitions, honing your skills to effectively navigate the M&A landscape.

Syllabus

Course Orientation and Module 1: Overview of M&A Topics and Evidence

You will learn the basic terminology of M&A, which we will use throughout the course. You will also learn why M&A deals happen, and how to identify drivers of M&A that are truly value-enhancing. Finally, you will study the history of M&A and learn key facts about previous M&A waves.

What determines a company’s stock price? Placing a value on companies is a key tool for M&A analysis. This module focuses on the main methods available to estimate stock prices, including discounted cash flow valuation and multiples-based valuation. You will learn these tools using the most up-to-date Finance theory and real-world examples.

Valuation analysis is a major part of the work that investment banks do when advising companies involved in M&A deals. You will learn that both target and acquirer valuation matter, and why. This module also focuses on what is special about the valuation and pricing of non-publicly traded targets. Finally, you will learn how to best use transaction multiples in the valuation of M&A deals.

This module starts with how to place a value on synergies using cash flow forecasts provided by management, and also using the stock market reaction to a new M&A deal. Next, you will also learn how to relate synergies to the premium paid for targets and how to calculate the net present value (NPV) of a deal. You will also learn the specifics of hostile takeover deals with a focus on governance, legal, and valuation issues.