To merge or not to merge?

An organization can't make that crucial decision without incisive analysis by financial planners and corporate managers. To determine how a potential merger or acquisition will impact company value, you must examine numerous factors well beyond the usual tax, legal, cash flow, and cash outlay considerations.

In short, you have to think like a strategist. And that's what this outstanding course prepares you to do.

This practical, hands-on course reflects today's business environment, where strategic combinations have replaced the hostile "do-it-our-way" takeovers of the past. It walks you through each step of the modern merger process, from evaluating candidates to handling post-merger integration issues.

Early on, you get financial statements and data for two hypothetical companies, a potential acquirer and a potential target. The course then examines these companies at every stage of a typical consolidation. Computer templates let you do the accompanying financial analysis. You also see how new technologies and Internet tools can help you better assess acquisition value for your own deals.

Learn how to:

• Understand the corporate motives behind mergers
• Use technology to gather information on potential candidates
• Screen targets using ratio analysis and strategic analysis
• Value candidates far more accurately
• Assess the overall impact of a merger on company performance
• Forecast expected future cash flows
• Determine the appropriate discount rate
• Choose the right mix of securities to transact the deal
• Follow through during the acquisition
• Plan for post-merger integration

Major Subjects Covered:

1. Overview of Mergers and Acquisitions
2. Financial Analysis
3. Securities Markets and Valuation
4. Motives for a Merger or Acquisition
5. Search and Screening of Acquisition Candidates
6. Valuing the Acquisition Target
7. Impact of a Merger on Financial Statements
8. Campaign to Acquire, Post-acquisition Analysis, Special Topics, and Wrap-up

About This Course:

As one course among many offered in the American Management Association's curriculum, Mergers and Acquisitions. A Strategic Valuation Approach is designed to introduce financial managers to the topic of mergers and acquisitions and to provide a practical, hands-on guide for evaluating and completing acquisitions. Growth through acquisition is occurring in an unprecedented number of companies today as strategic acquisitions replace the once-prevalent hostile takeovers by corporate raiders. In this new environment, it is imperative that financial managers understand how to blend strategic and financial concepts to evaluate potential acquisitions and .minimize the problems of postacquisition integration.

The course provides a brief review of relevant financial and business concepts but does presume familiarity with financial statements, accounting methods, and strategic analysis. A running example follows two companies throughout the course and demonstrates how to analyze potential acquisitions. Students who purchased the optional computer templates may use them with this analysis and the examination case at the end of the course as well as with potential acquisition candidates they evaluate in their work.

Emery A. Trahan, the author of the course, is Associate Professor of Finance at Northeastern University in Boston. Trahan specializes in corporate finance, with major teaching and research interest in mergers and acquisitions and valuation. He is also a Chartered Financial Analyst and a Certified Public Accountant, formerly associated with Peat, Marwick, Mitchell & Co. He earned his B.S. in Accounting at SUNY at Plattsburgh, and his M.A. and Ph.D. in Financial Economics at the University at Albany. Trahan conducts management seminars on corporate finance and value-based management and has served as a reviewer of many financial courses for the American Management Association. He has authored many articles in leading finance publications and has co-authored two other courses for the American Management Association.

The publisher would like to thank the following people for their review of the manuscript of this course: Dr. Steven Ferraro, Associate Professor of Finance, Pepperdine University, Malibu, California, and Brian Marinelli, C.P.A., Hanify and King, P.C., Boston, Massachusetts.

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