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Executive Education
Clariden Leadership Institute
M&A Financial Modeling (Hong Kong)
Thomas Kessler
IntegrationSuccess GmbH

This program has been independently accredited and certified by CPD
Thomas Kessler, IntegrationSuccess GmbH
  • Thomas has led some of the most successful M&A deals around the world – including Deutsche Post acquisition of Global Mail, Goodyear Sumitomo Rubber merger, Avaya Global Connect joint venture with Tata and Albany International and Geshmay group merger
  • His successful deal transactions have been selected by Harvard as part of Harvard Business School case studies on mergers and acquisitions
  • Accomplished faculty leader who has taught in institutions like the KPMG Zürich University, PwC European Center of Excellence and more

 

With over 19 years of M&A experience, Thomas Kessler has led major landmark M&A transactions including Deutsche Post acquisition of Global Mail, Deutsche Telekom Orange Netherlands combination, Goodyear Sumitomo Rubber merger, Avaya Global Connect JV with Tata, Wacker and Air Products JV and the Albany International and Geshmay group merger. The latter has been featured as a Harvard Business School Case Study. 

 

He is now the Founder and Managing Partner of IntegrationSuccess GmbH. His primary focus is on creating financial value for companies through M&A, JV and corporate restructuring. He has been involved in over 25 major transactions with a total valuation of more than US$20 billion. Thomas is an accomplished faculty leader in universities and institutions globally such as the KPMG, Zürich University PWC European Center of Excellence and Ericsson Training Center.

 


Testimonials

"This is one of the best courses I have attended. Very comprehensive and detailed in coverage." - SVP, TriQuint International Pte Ltd

 

"Thomas Kessler’s enthusiastic participation in all of our training was excellent. I have no doubt that it would not have been that success without his presence. Both of his expertise and personal attitude have made a great impact towards delegate’s expectations." - VP and MD, TriQuint International Pte Ltd

This course has been independently certified as conforming to universally accepted CPD guidelines. On average, this executive program contributes 16 hours towards your CPD.

Program Summary

 

Financial modeling is one of the most important aspects in any mergers and acquisitions. It is often the centrepiece of the entire M&A process that drives the overall valuation and sets the financial expectations in your acquisitions. Recent M&A research by Harvard suggest that 70% to 90% of acquisitions fail to meet the financial expectations of the acquirer because too often, company pay the wrong price in their acquisitions.


In this three-day intensive program on M&A Financial Modeling, you will learn how to construct a full merger model that incorporates sophisticated M&A concepts. With hands-on and interactive exercises, you will learn how to establish the right valuation benchmark for your acquisition, model the financial impact of your transaction – including earnings, synergies and cash flow analysis and review how to handle different acquisition financing features. In addition to equipping you with financial modeling skills, this program will explore the concepts on deal structuring, deal structures and sophisticated concepts on synergies by using largely successful synergies templates used by MNCs.

Led by a faculty director who has successfully led over US$20 billion of deal transaction, Thomas Kessler’s M&A transactions have been featured by Harvard Business School as HBS case study. You will also be exposed to group discussions and engage in live case studies with other financial leaders and you will have an opportunity to establish a network with other financial leaders like yourself across multiple industries and countries.



Programs, dates and locations are subject to change. In accordance with Clariden Global policy, we do not discriminate against any person on the basis of race, color, sex, religion, age, national or disability in admission to our programs.

Introduction

 

In an increasingly globalized world, M&As are essential mechanisms of shareholder value enhancement. M&A is facilitating access to new markets, capacities and technologies, as well as enabling organizations to focus on core competencies. Well-planned and strategic M&As are transforming a number of corporations into global or regional powerhouses and enabling unprecedented growth beyond geographical market limitations. As financial modelling in M&A is often the centrepiece of the entire M&A process, it is crucial that you and your organization has the right capabilities to develop a full merger model that takes into account all aspects of your M&A strategy. 


In this three-day intensive program on Mergers and Acquisitions Financial Modelling, you will learn how to construct a full merger model that incorporates sophisticated M&A concepts. With hands-on and interactive exercises, you will learn how to establish the right valuation benchmark for your acquisition, model the financial impact of your transaction – including earnings, synergies and cash flow analysis and review how to handle different acquisition financing features. In addition to equipping you with financial modelling skills, this program will explore the concepts on deal structuring, deal structures and sophisticated concepts on synergies by using largely successful synergies templates used by MNCs

This executive program is launched concurrently with Identifying Strategic Acquisitions and Structuring Successful M&A Deals. As both programs are designed to help you establish the right M&A capabilities for your organization, you are encouraged to send in multiple participants to these two highly popular M&A programs. Organizations who participate in both programs will receive additional discount – please enquire for further details.

What You Can Expect

  • Structuring the Deal - Understand how to structure an M&A deal and set up your financial model to take into account different deal structures
  • Valuation - Model the value of your target utilizing different valuation methods and set the right purchase price for the acquisition
  • Synergy Analysis - Value the synergies derived from the acquisition
  • Financial Impact of Acquisition - Model the financial impact of your transaction, including EPS accretion/dilution, contribution analysis, pro-forma financial statements and other financial consequences
  • Financing the Acquisition - Build a flexible funding structure and derive the cash flow required to finance the acquisition
  • Financial Forecasting - Forecast the financials of the combined entity, understand credit issues and leverage ratios
  • Strategic Planning - Perform sensitivity and scenario analysis

Who Will Benefit Most

 

This highly interactive program is designed for all C-level and senior level executives (SVP, VP, MD, Director, Head) who are involved in M&A or who are in these roles or related ones: CFO, Finance, Financial Controller, Banking, Treasury, Accounting, Strategic Planning / Management, Corporate Planning / Strategy, Group Strategy, Business Planning / Analysis / Development, Private Equity / Venture Capital, Investor / Investing, Valuation.

Program Outline

 

Day 1 - Morning

 

RATIONALE FOR MERGERS & ACQUISITIONS

  • MERGERS & ACQUISITION VS. STRATEGIC ALLIANCES
    When should you acquire versus forming a strategic alliance? What are the empirical characteristics of successful strategic alliances versus a successful merger or acquisition respectively?
    ‘Group Exercise I’ discussion of the key characteristics of M&A transactions vs. Joint Ventures

  • CURRENT TRENDS IN M&A
    What is driving deals in the region? – Inbound/Outbound – Industry Trends

  • INTRODUCTION OF THE M&A LIFE-CYCLE
    Gaining an overview of the three phases including a high level discussion of each step of the pre deal, deal, and post deal phase. Identification and definition of the key integration factors that will assure your success
    ‘Group Exercise II’ discussion of the M&A Life cycle

DEAL STRUCTURE

  • THE DEAL STRUCTURING PROCESS
    Linking acquisition objective and organizational structure. What form of payments should you be knowledgeable about when negotiating transactions?

  • DEAL STRUCTURES: ACQUISITIONS, MERGERS, JOINT VENTURES, SPIN-OFFS, SPLIT-OFFS, CARVE-OUTS AND DIVESTITURES, TARGET STOCK
    Typical deal structures, implications of asset deals and stock deals in mergers & acquisitions, structural intent, choice of transaction structure, benefit-risk profile of the respective corporate event?
    ‘Group Exercise III’ – participants will review publicly known transactions for each respective type and discuss the characteristics

  • MERGERS & ACQUISITIONS MODELING – P&L, Initial valuation, synergies

  • INTRODUCTION
    How to model your M&A transaction? Delegates will be working through all key steps to accomplish a merger model. The group work guides delegates through modeling topics as well as a M&A transaction

  • COMPLETING CORE FINANCIAL AND OPERATIONAL ANALYSIS ON A TARGET BUSINESS
    What are the most critical financial metrics that need to be fully understood?
    ‘Group Exercise IV’ Modeling and Review of the P&L
    • STEP 1: REVIEW TARGET’S HISTORICAL AND PROJECTED P&L, ADJUST IF NECESSARY

Day 1 - Afternoon

 

BUSINESS VALUATION

  • IDENTIFY THE KEY COMPONENTS OF THE PURCHASE PRICE FORMULA
    ‘Group Exercise V’ – Business valuation the simple way

  • THE DIFFERENT APPROACHES USED FOR VALUATION AND THEIR DIFFERENCES
    Group discussion of the valuation methodologies
    Group Exercise VI’ – Delegates will discuss a) the advantages and disadvantages of the discount cash flow (DCF) valuation method, b) the difference between enterprise value and equity value, c) the strengths and weaknesses of the income approach, d) when to use a market vs cost approach in valuation

  • MODELING THE INITIAL VALUE OF THE TARGET VALUATION
    Delegates will discuss the treasury method towards calculating the fully dilutive number of shares / the ITM (in-the-money) convertible shares to. In addition we will define the high level deal assumptions and apply the valuation methodologies using our case
    • STEP 2: VALUE TARGET COMPANY (DCF VS. MULTIPLES)
      • STEP 2.1: TREASURY METHOD TOWARDS CALCULATING THE FULLY DILUTIVE NUMBER OF SHARES
      • STEP 2.2: CALCULATE IN-THE-MONEY CONVERTIBLE SHARES
      • STEP 2.3: DEFINE ENTERPRISE VALUE
      • STEP 2.4: DEFINING THE DEAL ASSUMPTIONS
      • STEP 2.5: VALUING THE TARGET USING DCF AND MULTIPLES

SYNERGIES

  • ANALYZING TRANSACTION SYNERGIES AND RISKS
    Discussion of possible transaction challenges, risks, hurdles versus synergies and dis-synergies. How to identify and quantify synergies using interviews? Introducing two largely successful synergy templates used by MNCs

  • APPLY THE SYNERGY CONCEPT IN OUR CASE
    Delegates will identify synergies (revenue, operating, capex), model them and apply them in our model to demonstrate the impact on the target/combined case
    ‘Group Exercise VII’ Modeling of the synergies and their impact
    • STEP 3: IDENTIFY SYNERGISTIC VALUE BUILD INTO THE DEAL (REVENUE, COST, CAPEX)
    • STEP 4: USE BUYER P&L, TARGET P&L AND SYNERGY CASE TO BUILD
    • STEP 5: PRO-FORMA INCOME STATEMENT FOR THE COMBINED GROUP

Day 2 - Morning

 

MERGERS & ACQUISITIONS MODELING – CASH FLOW AND B/S STEPS

  • COMPLETING CORE WORKING CAPITAL ANALYSIS ON A TARGET BUSINESS
    What are the most important steps in the working capital analysis?
    ‘Group Exercise VIII’ – Working Capital Analysis and transfer into our case model
    • STEP 6: BUILD THE WORKING CAPITAL SCHEDULE (BASIS SALES/COGS)

  • COMPLETING CORE FINANCIAL AND OPERATIONAL ANALYSIS ON THE BALANCE SHEET OF A TARGET BUSINESS
    Discussion of the quality of asset and liability positions and most important net assets, net debt and debt like assets?
    ‘Group Exercise IX’ – Net Debt Analysis and application in our case model
    • STEP 7: REVIEW TARGET’S HISTORICAL (LTM) B/S AND BUILD PROJECTED B/S, ADJUST FOR CAPEX SYNERGIES, AND RESTRUCTURING INITIATIVES
    • STEP 8: DEVELOP A DEPRECIATION SCHEDULE FOR FIXED ASSETS (ADDITIONAL INFORMATION NEED TO BE ENTERED FOLLOWING THE PURCHASE PRICE ALLOCATION)
    • STEP 9: DEVELOP AN INTANGIBLE ASSET AMORTIZATION SCHEDULE

MERGERS & ACQUISITIONS MODELING – CASH FLOW AND B/S STEPS

  • COMPLETING CORE CASH FLOW ANALYSIS ON A TARGET BUSINESS
    What are the most important steps in the cash flow analysis? Analysis of the cash conversion rate, e.g. bridging EBIDA and Free Cash Flow?
    ‘Group Exercise X’ – Application in our case model
    • STEP 10: BUILD THE INITIAL CASH FLOW STATEMENT (AS MUCH AS POSSIBLE AT THIS STAGE)

MERGERS & ACQUISITIONS MODELING – PRICING, FINANCING

  • ‘Group Exercise XI’ – Development of a pricing understanding in our case model
    • STEP 11: DEFINE A ROUGH PRICE ASSUMPTION BASED ON THE INITIAL VALUATION
    • STEP 12: DEFINE THE POTENTIAL RANGE OF A CONTROL PREMIUM INCLUDING IMPACT OF ITM STOCK OPTIONS, ITM CONVERTIBLES

Day 2 - Afternoon

 

MERGERS & ACQUISITIONS MODELING – PRICING, FINANCING

  • DELEGATES WILL REVIEW THE MOST IMPORTANT CONCEPTS THAT INFLUENCE PRICING AND FINANCING OF A TRANSACTION
    ‘Group Exercise XII’ – Application in our case model
  • FUNDAMENTALS OF CAPITAL STRUCTURE
    Review of cost versus flexibility characteristics of financial instruments. Discussion of pro’s and con’s
  • FINANCING VEHICLES / ALTERNATIVES
    Review of available instruments covering a broad range from debt to equity structures including hybrid instruments
  • LINKING DEAL STRUCTURES TO FINANCING STRUCTURES
    Review of typical deal structures and associated financial structures. Discussion of financing solutions such as equity issuance, leveraged acquisitions and leveraged buyouts, bridge financing deferred considerations: earn-outs, CVRs
    • STEP 13: FINANCING OF THE TRANSACTION - PREPARE INITIAL FINANCIAL STRUCTURE

MERGERS & ACQUISITIONS MODELING – PRICING, FINANCING

  • ‘Group Exercise XIII’ – Developing the financing structure and application in our case model
    • STEP 14: DEVELOP INITIAL FEES, PROCEEDS, INTEREST RATES AND AMORTIZATION SCHEDULES AND DEFINE A MINIMUM CASH BALANCE
      • ESTABLISH FINANCIAL INSTRUMENT OVERVIEW (COST AND TIMING)
      • DEFINE MINIMUM CASH BALANCE (RULE OF THUMB 2-10% OF SALES)
    • STEP 15: DEVELOP AN INTEREST RATE OVERVIEW BY YEAR
    • STEP 16: BUILD A DEBT SCHEDULE
    • STEP 17: BUILD AN AMORTIZATION SCHEDULE FOR CAPITALIZED FINANCING COST

Day 3 - Morning

 

MERGERS & ACQUISITIONS MODELING – PPA

  • TAX CONSIDERATIONS
    What are the four key M&A tax considerations used in deal structures. Delegates will review the Link between deal structures
    ‘Group Exercise XIV’ Delegates will model the Purchase Price Allocation (PPA) and its impact if the M&A transaction is an asset deal or stock deal transaction
    • STEP 18: CONDUCT A PURCHASE PRICE ALLOCATION
    • STEP 19: ASSESS BOOK AND TAX STEP UP OF ASSETS PURCHASED - IN CASE OF AN ASSET DEAL

MERGERS & ACQUISITIONS MODELING – PPA
‘Group Exercise XV’
 Delegates will continue to model the impact of the Purchase Price Allocation (PPA)

  • STEP 20 ASSESS BOOK STEP UP OF ASSETS PURCHASED IN CASE OF AN EQUITY DEAL
  • STEP 21: ASSOCIATE PURCHASE PRICE ALLOCATION EFFECTS TO CONSOLIDATED B/S
  • STEP 22: BUILD THE BALANCE SHEET POST PPA
  • STEP 23: DEVELOP AND EXPAND TAX SCHEDULE

Day 3 - Afternoon

 

MERGERS & ACQUISITIONS MODELING – TRANSACTION FINANCIALS

  • TRANSACTION FINANCIALS
    ‘Group Exercise XVI’ Delegates will complete the financial modeling for the P&L and Balance sheet post deal including a cash analysis needed to support the financing structure used
    • STEP 24: PROJECTED P&L POST DEAL
    • STEP 25: BUILD THE TRANSACTION BALANCE SHEET
    • STEP 26: IDENTIFY HOW MUCH CASH IS GENERATED TO REFINANCE TRANSACTION FINAINCING

MERGERS & ACQUISITIONS MODELING – TRANSACTION FINANCIALS

  • ‘Group Exercise XVII’ – Developing the review and model the returns from the transaction, compare against the hurdle rate for transactions and reflect on the price ranges for the transaction
    • STEP 27: REVIEW IF THE RETURNS BASED ON EQUITY VALUE IMPROVEMENT MEET FIRMS HURDLE RATE AND MAXIMUM PRICING/VALUATION FOR THE TRANSACTION

  • ‘Group Exercise XVIII’ – In closing the transaction modeling delegates will review the impact of the transaction on EPS
    • STEP 28: PRESENTATION OF TRANSACTION IMPACT ON EPS ACCRETION / DILUTIO

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Venue: Royal Plaza Hotel, Hong Kong
Date: 31 Jan - 2 Feb 2018
Faculty: Thomas Kessler
Early Bird 1: US$2,890 (11 Dec 2017)
Early Bird 2: US$3,090 (10 Jan 2018)
Regular Fee: US$3,190
Group Discount: 2nd participant get 10%, or register 3 participants and 4th participant get a complimentary seat
(1 discount scheme applies)
Contact: kevin@claridenglobal.org
 
 
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