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8K Release Mergers & Acquisitions. Kevin M Brett April 30, 2013. Let’s Make a Deal Friendly or Hostile. 1,896 mergers or acquisitions $471.5 billion Hewlett Packard/Compaq Disney/ABC ABC/ESPN AOL/ Time Warner Time/Warner Brothers Daimler Benz/Chrysler Budweiser/Corona. Why M&A?.

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8k release mergers acquisitions

8K ReleaseMergers & Acquisitions

Kevin M Brett

April 30, 2013

let s make a deal friendly or hostile
Let’s Make a DealFriendly or Hostile
  • 1,896 mergers or acquisitions
  • $471.5 billion
  • Hewlett Packard/Compaq
  • Disney/ABC
  • ABC/ESPN
  • AOL/ Time Warner
  • Time/Warner Brothers
  • Daimler Benz/Chrysler
  • Budweiser/Corona
why m a
Why M&A?
  • Gain new technology and talent
  • Grow Revenue
  • Strategic Assets
  • Market Share
  • Synergies
change resistant
Change Resistant?
  • “I'm all for progress. It's change I object to.” – Mark Twain
why not m a
Why NOT M&A
  • Approximately 70 percent of deals fail
  • Inadequate “Due Diligence”
  • Acquiring companies blow integration
  • Acquired employees head for the exits
  • Need to welcome acquired employees
common questions on deals
Common Questions on Deals
  • Size of Deal?
  • Financing?
  • How many are going to be laid off?
  • Is the deal accretive or dilutive to EPS?
  • Is there any product or customer overlap?
  • How will you integrate the two companies?
  • Anti-Trust Issues?
  • Will you report the deal on a Pro Forma basis?
financing the deal paying a premium
Financing the Deal?Paying a “Premium?”
  • Cash from Balance Sheet
  • Stock (1 for 1 or Ratio)
  • S4 (Issue More Stock)
  • LBO (Leveraged Buyout): Combo of Cash/Stock and Debt
gaap vs pro forma
GAAP vs. Pro Forma
  • GAAP Greater or Equal Prominence to Pro Forma – SEC Reg. G
  • GAAP: Generally Accepted Accounting Principles
  • Pro Forma, Non-GAAP or Earnings Before Special Items
  • Pro Forma: “For The Sake of Form”
  • Pro Forma: Results from Continuing Operations
gaap q1 income statement mallard com duck nasdaq
GAAP: Q1 Income StatementMallard.com (DUCK: NASDAQ)
  • Revenues: $2 million
  • COGS: $1 million
  • Gross Margin: $1 million
  • SG&A: $250,000
  • R&D: $250,000
  • Amortization: $1 million
  • Operating Margin: ($500,000)
  • Taxes: $200,000
  • Net Loss: ($700,000)
pro forma q1 income statement mallard com duck nasdaq
Pro Forma: Q1 Income StatementMallard.com (DUCK: NASDAQ)
  • Revenues: $2 million
  • COGS: $1 million
  • Gross Margin: $1 million
  • SG&A: $250,000
  • R&D: $250,000
  • Operating Margin: $500,000
  • Taxes: $200,000
  • Net Income (Loss): $300,000
doj sues to block 20 1 billion bud corona merger
DOJ Sues to Block $20.1 Billion BUD/Corona Merger
  • Anheuser Busch, 39%
  • Miller Coors, 26%
  • Grupo Modelo, 7%
  • Heineken USA, 6%
  • Others, 22%
m a news release guidelines
M&A News Release Guidelines
  • “Class Assignment: Do Not Trade”
  • Both companies announce definitive merger agreement
  • Establish the price of the deal
  • Announce cash and/or stock financing (1 for 1)
  • Accretive to acquiring company’s EPS in one year
  • Subject to successful completion of Hart-Scott-Rodino and other closing conditions
  • Quotes from both CEOs
  • Both Boilerplates/One Safe Harbor