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Overview
Mergers & Acquisitions: Where Theory Meets Practice is a new kind of program at SMU Cox. We’re delivering practical intellectual stimulation that satisfies your academic curiosity and balances theory with ready-to-use insights. You get the academic rigor you expect plus interactive exercises, real-world case studies and lessons from leading industry practitioners that help you turn ideas into action.
This results-focused balance begins with leadership from Associate Dean Shane Goodwin, Ph.D., a former investment banker with more than 20 years of M&A experience on Wall Street, including Goldman Sachs and Citigroup.
In addition to our own expert faculty, Dr. Goodwin has tapped the unmatched SMU Cox network for M&A experts from Goldman Sachs, Evercore, AT&T, PepsiCo, Gibson Dunn, McDermott Will & Emery, and Kimberly-Clark, plus former strategy consultants from McKinsey and Bain.
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M&A Strategy
For most companies now, M&A isn't an optional part of their strategy - it's an essential component. Treating M&A as a strategic capability can give companies an edge that their peers will struggle to replicate.
Primary objective: The M&A Environment: Motivations for M&A and why it occurs
Secondary objective: Provide an understanding of:- The primary motivations for M&A activity;
- How to engage in M&A thematically with strategic rationale;
- Winning in M&A: How to become an advantaged acquirer and increase shareholder value;
- How to manage your reputation as an acquirer ;
- M&A activity in an historical context;
- Key empirical findings; and
- Primary reasons some M&A fail to meet expectations
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Regulatory Considerations -
The M&A EnvironmentPrimary objective: To enable students to understand the key elements of selected federal and state regulations applicable to the M&A environment
Secondary objective: Provide students with an understanding of:- The key elements of federal securities laws;
- Regulations governing tender offers;
- Antitrust laws, including the Sherman Act, Clayton Act and HSR;
- Antitrust regulatory procedures and guidelines;
- State regulations affecting M&A;
- Regulated industries and the implications for M&A;
- Environmental and labor laws affecting M&A;
- Important Federal legislation impacting M&A;
- Key elements of the Sarbanes-Oxley legislation and Dodd-Frank legislation; and
- Foreign investment regulations administered by the Committee on Foreign Investment in the United States (CFIUS or the Committee)
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The M&A Process
Process yields "Premium Valuation"Primary learning objectives: To provide students with an understanding of:
- The highly practical “planning-based” approach to managing the acquisition process; and
- The issues associated with each phase of the M&A process
Secondary learning objectives: To provide students with an understanding of how to:
- Select the correct strategy from a range of reasonable alternatives;
- Develop an acquisition plan;
- Conduct an acquisition search, to screen potential candidates, and to make initial contact with potential targets;
- Identify the four concurrent activities within the negotiation phase and how they interact to determine purchase price;
- Identify the importance of pre-closing planning and post-closing execution; and
- Determine factors critical to successfully integrating businesses;
Pre-Purchase Decision Activities Phase 1: Business Plan
Phase 2: Acquisition Plan
Phase 3: Search
Phase 4: Screen
Phase 5: First Contact
Phase 6: NegotiationPost-Purchase Decision Activities
Phase 7: Integration Plan
Phase 8: Closing
Phase 9: Integration
Phase 10: Evaluation -
Due Diligence
Primary objective: To enable students to understand how completing a due diligence process allows a potential buyer or investor to learn more about a company to finalize a transaction or investment.
Secondary objective: Provide students with an understanding of:- Why it is a key step for any major transaction or investment;
- What information will need to be investigated before a deal can be finalized; and
- Key aspects of due diligence, including strategic "fit" assessment, financial performance, legal, environmental, and others
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Discounted Cash Flow
Primary learning objectives: To provide students with an understanding of:
- Business valuation using discounted cash flow valuation techniques; and
- The importance of understanding assumptions underlying business valuations
Secondary learning objectives: To provide students with an understanding of:
- Discount rates and risk as applied to business valuation;
- How to analyze risk;
- Alternative definitions of cash flow and how and when they are applied;
- The advantages and disadvantages of the most commonly used discounted cash flow methodologies;
- The sensitivity of terminal values to changes in assumptions; and
- Adjusting firm value for non-operating assets and liabilities.
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Relative Valuation
“If you think I’m crazy, you should see the guy who lives across the hall” - Jerry Seinfeld
Primary learning objective: To provide students with knowledge of alternatives to discounted cash flow valuation methods, including:
- Market Approach
• Comparable companies
• Comparable transactions
• Same industry or comparable industry - Asset oriented approach
• Tangible book value
• Liquidation value
• Break-up value - Replacement Cost approach
- Weighted average method
Secondary learning objective: Enable students to understand how real options apply to M&A
- Market Approach
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Private Company Valuation
Primary learning objective: Provide students with a knowledge of how to analyze and value privately held firms
Secondary learning objectives: Provide students with a knowledge of:
- Characteristics of privately held businesses
- Challenges of valuing and analyzing privately held firms;
- Why and how private company financial statements may have to be recast; and
- How to adjust valuation for liquidity risk, the value of control, and minority risk
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Accounting & Tax Considerations
Primary Learning Objective: To provide students with knowledge of how accounting treatment and tax considerations impact the deal structuring process.
Secondary Learning Objectives: To provide students with knowledge of
- Purchase (acquisition method) accounting used for financial reporting purposes;
- Goodwill and how it is created; and
- Alternative taxable and non-taxable transactions
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Deal Structure & Legal Considerations
Primary Learning Objective: To provide students with a knowledge of the M&A deal structuring process
Secondary Learning Objectives: To enable students to understand:
- The primary components of the process;
- Payment considerations; and
- Transaction structuring and legal considerations
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Post-Closing & Integration
Primary learning objectives: Key activities that make-up the integration process
Secondary learning objectives: To provide students with knowledge of:
- Post-merger integration organizations
- How to develop communication plans
- How to create a new organization
- How to develop staffing plans, and
- Integrating corporate cultures
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Private Equity
Primary Learning Objective: To provide students with a working knowledge of private equity and leveraged buyouts (“LBOs”)
Secondary Learning Objectives: To provide students with a knowledge of:
- The underpinnings of LBO structuring and valuation models;
- How is private equity financed;
- Advantages and disadvantages of LBO structures;
- How LBOs create value;
- Leveraged buyouts as financing strategies;
- Factors critical to successful LBOs; and
- Common LBO capital structures.
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Negotiations Seminar
Primary Learning Objective: To provide the newest negotiation tools needed to ensure success in M&A negotiations using:
- Interactive format providing individualized attention; and
- Experts that will diagnose your current strategies
Secondary Learning Objective: To increase the value you gain from all negotiations while improving your relationships by:
- Understanding how effective negotiators manage emotion and separate the people from the problem, while not ignoring the people;
- Understanding the necessity of keeping your eye on your side of the table, and your ear on their side;
- Learning how to convey, use and manage time pressure effectively;
- Mastering the art and science of persuasion;
- Managing the bidding process;
- Understanding power relationships;
- Utilizing carefully crafted simulations based on real-life negotiations to test and refine your skills
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Cross-Border M&A
Primary Learning Objective: To provide an overview of how to analyze, structure, and value cross-border M&A
Secondary Learning Objectives: To provide an understanding of:
- Motives for international expansion
- Common international market entry strategies
- A structured cross-border M&A process
- Planning and implementing cross-border transactions in developed countries
- Planning and implementing cross-border transactions in emerging countries.
- Characteristics and determinants of cross-border M&A
- Valuing cross-border transactions
- Empirical studies of financial returns to international diversification
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Shareholder Activism
The rise of hedge fund activists during the past two decades has sparked debate across markets, boardrooms and even during the presidential campaign: are activist shareholders good or bad for business?
Primary Learning Objective: To provide an overview of the shareholder activist landscape, issues in activist investing from the perspectives of both investors and corporations that are potential targets.
Secondary Learning Objectives:
- What hedge fund activism is and why has it become important?
- The institutional background and legal rules governing activist investing – disclosure, insider trading, and voting, etc.
- How activism has reshaped corporate policies (including payouts, investments, and governance) and firm boundaries (via assets reallocation and spin-offs/acquisitions)?
- Has activism imposed “short-termist” pressure on corporate managers?
- How the various constituencies (activists, targets, and advisors) should work together?