Valuation for M & A : building and measuring private company value / Chris M. Mellen, Frank C. Evans.

Revised edition of Valuation for M & A, c2010.

Includes index.

"Determine a company's value, what drives it, and how to enhance value during a M & A Valuation for M & A lays out the steps for measuring and managing value creation in non-publicly traded entities, and helps investors, executives, and their advisors determine the optimum strategy to enhance both market value and strategic value and maximize return on investment. As a starting point in planning for a transaction, it is helpful to compute fair market value, which represents a floor value for the seller since it by definition represents a value agreed upon by any hypothetical willing and able buyer and seller. But for M & A, it is more important to compute investment value, which is the value of the target company to a strategic buyer (and which can vary with each prospective buyer). Prepare for the sale and acquisition of a firm Identify, quantify, and qualify the synergies that increase value to strategic buyers Get access to new chapters on fairness opinionsand professional service firms Find a discussion of Roger Grabowski's writings on cost of capital, cross-border M & A, private cost of capital, intangible capital, and asset vs. stock transactions Inside, all the necessary tools you need to build and measure private company value is just a page away!"-- Provided by publisher.

Print version record and CIP data provided by publisher.

Cover; Title Page; Copyright; Contents; Preface; Dedication and Acknowledgments; Part I Introduction; Chapter 1 Winning through Mergers and Acquisitions; Critical Values Shareholders Overlook; Stand-Alone Fair Market Value; Investment Value to Strategic Buyers; Win-Win Benefits of Merger and Acquisition; Computation of Cavendish's Stand-Alone, Fair Market Value; Investment Value to Strategic Buyer; Part II Building Value; Chapter 2 Building Value and Measuring Return on Investment in a Private Company; Public Company Value Creation Model; Computing Private Company Value Creation and ROI.

Analyzing Value Creation StrategiesChapter 3 Market and Competitive Analysis; Linking Strategic Planning to Building Value; Assessing Specific Company Risk; Competitive Factors Frequently Encountered in Nonpublic Entities; Financial Analysis; Conclusion; Chapter 4 Merger and Acquisition Market and Planning Process; Common Seller and Buyer Motivations; Why Mergers and Acquisitions Fail; Sales Strategy and Process; Acquisition Strategy and Process; Due Diligence Preparation; Chapter 5 Measuring Synergies; Synergy Measurement Process; Key Variables in Assessing Synergies.

Synergy and Advance PlanningPart III Measuring Value; Chapter 6 Valuation Approaches and Fundamentals; Business Valuation Approaches; Using the Invested Capital Model to Define the Investment Being Appraised; Why Net Cash Flow Measures Value Most Accurately; Frequent Need to Negotiate from Earnings Measures; Financial Statement Adjustments; Managing Investment Risk in Merger and Acquisition; Conclusion; Chapter 7 Income Approach: Using Expected Future Returns to Establish Value; Why Values for Merger and Acquisition Should Be Driven by the Income Approach.

Two Methods within the Income ApproachThree-Stage DCF Model; Establishing Defendable Long-Term Growth Rates and Terminal Values; DCF Challenges and Applications; Chapter 8 Cost of Capital Essentials; Cost of Debt Capital; Cost of Preferred Stock; Cost of Common Stock; Fundamentals and Limitations of the Capital Asset Pricing Model; Modified Capital Asset Pricing Model; Build-Up Model; Summary of Rate of Return Data; Private Cost of Capital; International Cost of Capital; How to Develop an Equity Cost for a Target Company; Reconciling Discount Rates and P/E Multiples; Conclusion.

Appendix 8A Using Specific Company Risk StrategicallyChapter 9 Weighted Average Cost of Capital; Iterative Weighted Average Cost of Capital Process; Shortcut Weighted Average Cost of Capital Formula; Common Errors in Computing Cost of Capital; Chapter 10 Market Approach: Using Guideline Public Companies and M & A Transactions; Transaction Multiple Method; Guideline Public Company Method; Selection of Valuation Multiples; Commonly Used Market Multiples; Chapter 11 Asset Approach; Book Value versus Market Value; Premises of Value; Use of the Asset Approach to Value Noncontrolling Interests.