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| Preface | |
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| Acknowledgments | |
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| The Middle Market | |
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| Private Capital Markets | |
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| Segmented Markets | |
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| Why Are Markets Segmented? | |
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| Capital Providers | |
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| Owners' and Managers' Views of Risk/Return | |
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| Buyers | |
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| Market Activity | |
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| Valuation Perspectives for the Private Markets | |
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| Private Business Valuation Can Be Viewed through Different Standards of Value | |
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| Market Value | |
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| Fair Market Value | |
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| Fair Value | |
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| Incremental Business Value | |
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| Investment Value | |
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| Owner Value | |
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| Collateral Value | |
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| Book Value | |
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| Why the Different Versions of Value? | |
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| Valuation as a Range Concept | |
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| Value Worlds and Deals | |
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| An Alternative Valuation Approach | |
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| Corporate Development | |
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| Why Acquire? | |
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| The Dismal Ds | |
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| Alternatives | |
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| The Acquisition Process | |
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| The Pipeline and Filter | |
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| Approaching the Target | |
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| The Balance between a Deep Dive and Locking In the Deal | |
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| Lower-Middle Market versus Middle Market Deals | |
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| Valuation from a Strategic���s Perspective | |
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| Structuring the Transaction | |
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| The Bid | |
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| Due Diligence | |
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| Integration | |
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| Case Study #1 | |
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| Strategic Rationale | |
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| Challenges | |
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| Transaction | |
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| Lessons Learned | |
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| Case Study #2 | |
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| Practical Tips and What Causes Deals to Fail | |
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| What Should We Acquire? | |
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| Why Are We Doing This? | |
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| Alignment of Interests | |
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| Allocate Enough Resources | |
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| If It Can Go Wrong, It Will Go Wrong | |
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| A Global Perspective | |
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| Advantages of Global M&A | |
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| Challenges to Global M&A | |
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| Negotiations and the Importance of Cultural Tune-In | |
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| Strategic Due Diligence | |
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| Postmerger Integration: Are the Odds in Your Favor? | |
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| From the Start: Think Integration | |
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| Acquisitions that Build Value | |
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| Set Clear Expectations and Invest in High-Quality, Two-Way Communication | |
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| Acknowledge Cultural Differences but Simultaneously Create a Common Corporate Culture with a Single Goal: Achieving High Performance | |
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| Move to a Cross-Border Operating Model | |
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| The Legal Environment and the Acquisition Process | |
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| The Legal Environment and the Conduct of Business | |
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| Taxation | |
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| Labor | |
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| Foreign Corrupt Practices Act (FCPA) | |
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| Success Factors | |
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| The M&A Practice and Processes | |
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| Practice Management | |
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| Primary M&A Advisors | |
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| Marketing the M&A Practice | |
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| Networking | |
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| Marketing and Advertising | |
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| Pretransaction Consulting | |
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| Valuation Services | |
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| Other Consulting Services | |
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| Becoming an Expert | |
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| Understanding the Private Business Owner | |
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| Client Acceptance | |
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| Initial Financial Analysis | |
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| Value Discussions | |
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| Process Discussions | |
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| Confidentiality | |
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| Client Engagement | |
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| Identification of the Parties | |
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| Scope of Service | |
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| Limitations and Disclosures | |
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| Fees | |
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| Double Lehman Formula | |
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| Termination and Tail | |
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| Licensure Issues in the M&A Business | |
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| Sell-Side Representation and Process | |
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| Selling Process Overview | |
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| Data Collection | |
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| Industry Research and Identifying Buyer Types | |
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| The Marketing Book | |
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| Marketing Process | |
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| Negotiating Price and Terms | |
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| Structuring the Transaction | |
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| Receiving Letters of Intent or Term Sheets | |
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| Due Diligence | |
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| Definitive Agreements | |
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| Closing Process | |
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| Buy-Side Representation and Process | |
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| Strategy | |
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| Engagement and Fees | |
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| The Filter | |
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| Financing | |
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| Quality of Earnings | |
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| Coordination | |
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| Integration | |
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| Mergers | |
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| Initial Analysis of Both Entities | |
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| Strategic Rationale | |
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| Valuation Modeling | |
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| Understand Cost, Operational, and Cultural Differences | |
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| Develop the Integration Plan | |
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| Deal Structure and Negotiations | |
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| Due Diligence | |
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| Legal Process and Closing | |
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| Postclosing Integration | |
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| Professional Standards and Ethics | |
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| Role of the M&A Advisor in the Economy | |
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| A Whole New Way | |
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| The Middle Market Standard | |
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| Ethical and Professional Standards | |
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| Competence and Professionalism (Reputation) | |
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| Best Practices (Activities) | |
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| Ethics (Behavioral Boundaries) | |
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| Country Specific (Customs) | |
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| M&A Technical Discussions | |
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| Financial Analysis | |
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| Financial Reporting Motivation | |
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| EBITDA | |
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| Balance Sheet Analysis | |
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| Working Capital | |
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| Normalization | |
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| Deal Structure and Legal Documentation | |
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| Attorney's Role | |
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| Preliminary Legal Documents | |
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| Confidentiality Agreement | |
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| Letter of Intent | |
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| Structure of the Deal | |
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| Stock Sale/Merger | |
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| Asset Purchase | |
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| Section 338(h)(10) Election in a Stock Sale | |
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| Purchase Price | |
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| Consulting and Employment Agreements | |
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| Due Diligence | |
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| Acquisition Agreements | |
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| Representations and Warranties | |
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| Qualifications to Representations and Warranties | |
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| Indemnification | |
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| Earnouts | |
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| Parameters | |
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| Benefits of Earnouts | |
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| Shortcomings of Earnouts | |
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| Regulatory Compliance | |
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| Tax Structure and Strategy | |
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| Tax Fundamentals | |
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| Transaction Tax Basics | |
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| Asset Transactions | |
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| Stock Transactions | |
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| Stock versus Asset Sale Example | |
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| Negotiations Based on Structure | |
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| Asset Transaction Details | |
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| Buyer Tax Issues | |
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| Tax Glossary and Reference | |
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| Tax Provisions Used in M&A | |
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| Installment Sales | |
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| Risk of Forfeiture | |
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| Assets that Qualify for Installment Treatment | |
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| Installment Planning Opportunity | |
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| Section 1031 (Like-Kind) Exchanges | |
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| Third-Party Exchanges | |
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| Partnership M&A | |
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| General Partnership Doctrine | |
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| Partnership versus S Corporation | |
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| Partnership Gain Tracking Rules | |
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| Purchase Price Allocation for Partnership Buyers | |
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| Corporate M&A Issues | |
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| Contributions to Corporations | |
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| Mergers and Reorganizations | |
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| Net Operating Loss Limitations | |
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| Stock/Asset Sale Election: Section 338 | |
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| S Corporation Issues | |
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| Tax Glossary and Reference | |
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| Regulation and Compliance | |
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| Protecting Investors: Securities Act of 1933 | |
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| Exemptions under the 33 Act | |
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| Commonly Used Private Placement Exemptions | |
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| Keeping the Markets Honest: Securities Exchange Act of 1934 | |
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| Requirements and Rules | |
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| Williams Act | |
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| Antitrust Issues and Laws You May Encounter in the Deal | |
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| Hart-Scott-Rodino Act | |
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| Specific Industries | |
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| Exon-Florio | |
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| Other Regulatory Issues and Laws You May Encounter in the Deal | |
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| Bulk Sales Laws | |
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| The WARN Act | |
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| The Investment Banker's Perspective | |
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| SEC Provisions for Broker-Dealers | |
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| Investment Advisers Act and Investment Company Act of 1940 | |
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| FINRA Provisions for Broker-Dealers | |
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| The Company���s Perspective | |
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| Process of Issuing and Selling Securities in the Deal | |
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| State Blue-Sky Laws | |
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| Considerations for Public Companies | |
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| Financing Sources and Structures | |
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| Perspective | |
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| Buyouts | |
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| Buyout Deal Structure | |
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| Bridging the Valuation Gap | |
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| Recapitalization | |
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| Acquisitions | |
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| Financing Primer | |
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| Capital Structure | |
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| Factors Shaping the Capital Structure | |
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| Sources and Types of Funding | |
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| Debt | |
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| Private Equity | |
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| Personal Guarantees | |
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| Due Diligence | |
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| Traditional Due Diligence | |
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| Financial Matters | |
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| GAAP Compliance | |
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| Tax Impact and Compliance | |
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| Compensation and Benefits | |
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| Legal | |
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| Information Technology | |
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| The Diligence Team | |
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| Due Diligence Process | |
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| Public versus Private | |
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| Impact of Globalization | |
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| Who Relies on Due Diligence? | |
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| Quality of Earnings | |
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| Financial Statement Audits | |
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| Market Valuation | |
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| Reasons for Appraisal | |
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| Determine the Value Subworld | |
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| Calculate the Benefit Stream | |
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| Synergies | |
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| Determine Private Return Expectation | |
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| Specific Investor Return | |
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| Industry-Specific Return | |
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| General Investor Returns | |
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| General Acquisition Selling Multiples | |
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| Derive Value | |
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| Global Perspective | |
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| Epilogue for Business Owners | |
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| Appendix | |
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| Transaction Examples | |
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| Transaction Valuation | |
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| Tools, Models, Resources, and Templates | |
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| Glossary | |
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| Notes | |
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| About the Authors | |
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| About the Contributors and Reviewers | |
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| Index | |