Structuring_a_successful_deal

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1、StructuringasuccessfulM&AdealbyBillJamieson,Partner31October200811OverviewDuringthispresentation,IwilloutlinesomeofthemostcommonstructuresinM&Atransactions,andexploresomeofthecommercialreasonswhyonestructuremightbepreferredoveranother.Themethodsoffinancinga

2、transactionareintegraltoitsstructuresoIwillconsiderthevariousmeansofraisingfundstopayforacquisitions,includingdebtandequityfinance.2M&AconsiderationsTherearemanyconsiderationswhichthebuyerandsellerofabusinesswilltakeintoaccountinstructuringadeal.Someofthemo

3、stimportantaresetoutbelow:(a)Thenatureofthetargetoftheacquisitionwillusuallyaffectthestructureofthedealsignificantly-ifthetargetisapubliccompany,apublicofferwillusuallyberequired,whichputsstrictlimitationsonthewaytheacquisitionofthecompanycanbeconducted.Thi

4、sisnotnormallyamatterofchoicefortheparties,althoughcertainfactorscandictatewhichrouteistaken.(b)Thebuyerwillneedtodecidewhetheritwantstoacquirethetargetcompanyitselffromitsshareholders,orwhetheritwouldprefertopurchasesomeoralloftheassetsfromthetargetcompany

5、.(c)Doesthebuyerneed(orwant)totakeownershipof100%ofthetarget,ismanagementcontrolsufficientordoesitmerelywantastrategicinvestmentinthetarget?Therelativeimportancetothebuyerofacquiringthewholeofthetargetwillinlargepartaffectthestructureofthetransaction.(d)The

6、sellermayconsideritcanobtainabetterpriceforthebusinessbyopeningitouttocompetitivebids.Alternatively,itmayprefertherelativeprivacyandflexibilityofacontractualsaleandpurchasebetweentwoormoreparties.(e)Thenatureoftheconsideration,orpayment,fortheacquisitionofa

7、businesswillbeofkeyimportancetobothsellerandbuyer.Variousstructurescanbeemployedsothatthepaymentofconsiderationisdeferredsoasbettertoreflectthevalueofthebusiness.Thesellermaywishtogetasmuchmoneyasitcanfromthesaleofthebusinessandthenseverlinksaltogether,oral

8、ternativelyprofitfromnewinvestmentfromthebuyerandthereforetakesomeequityinthecombinedentity.(f)Inaddition,thebuyermaynotbeabletofinancetheacquisitionoutofsparecash,sowillhavetochoosebetweenraisingfunds