Introduction to M&A

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M & A – Merger and Acquisition

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Introduction

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Introduction to Mergers & Acquisitions

MERGER A combination of two companies to form a new entity, in which the individual companies cease to exist.

For example, in the 1999 merger of Glaxo Welcome and SmithKline Beecham, both firms ceased to exist when they merged, and a

new company, GlaxoSmithKline was created.

ACQUISITION One company acquires other company, in which the company being acquired (c/d as target co.),ceases to exist and becomes a part of

the acquiring co. and no new co. is formed.

For example, Tata Steel acquired Corus for $12.2 bn in 2007.

TAKEOVER A hostile acquisition is usually termed as takeover.

All of them are means of corporate restructuring.

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Types of M&A

HORIZONTAL MERGER

Combination of two or more firms operating in the same stage of production.

Ex : Merger of RPL with RIL in the year 2009.

VERTICAL MERGER

Combination of two firms that operate in different stages of production.

Ex : Maersk Logistics & Damco merge on June 2009

CONGLOMERATE MERGER

Combination of two or more firms which are unrelated lines of business.

Ex : Merger of Infovision and Serco Group on Nov 2008

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Types of Acquisitions

FRIENDLY ACQUISITION

The acquisition of a target company that is willing to be taken over.

Ex : IBM acquires Daksh e-Services on May 2004.

HOSTILE ACQUISITION

Target has no desire to be acquired and actively rebuffs the acquirer and refuses to provide any confidential information.

Ex : Kraft acquires Cadbury on 19 Jan 2010 for $18.9 bn

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Reasons For M&As

There is not one single reason for a merger or takeover but a multitude of reasons

(1) SYNERGISTIC OPERATING ECONOMIES

Synergy means working together. The gains obtained by working together by amalgamated undertakings result into synergistic operating

gains.

These gains are most likely to occur in horizontal mergers in which there are more chances for eliminating duplicate facilities. Vertical and

conglomerate mergers do not offer these economies.

The worth of the combined undertaking should be greater than the sum of the worth of the two separate undertakings i.e. 2+2 = 5.

(2) DIVERSIFICATION

Mergers and acquisitions are motivated with the objective to diversify the activities so as to avoid putting all the eggs in one basket and

obtain advantage of joining the resources for enhanced debt financing and better serviceability to shareholders.

(3) TAXATION ADVANTAGES

Mergers take place to have benefits of tax laws and company having accumulated losses may merge with a profit earning company that will

shield the income from taxation.

Section 72A of Income Tax Act, 1961 provides this incentive for reverse mergers for the survival of sick units.for e.g. acquisition of Global

Trust Bank(GTB) by Oriental Bank of Commerce(OBC).

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Reasons For M&As

(4) GROWTH ADVANTAGE

Mergers and acquisitions are motivated with a view to sustain growth or to acquire growth.

(5) PRODUCTION CAPACITY REDUCTION

To reduce capacity of production merger is sometimes used as a tool particularly during recessionary times as was in early 1980 in USA.

The technique is used to nationalize traditional industries.

(6) MANAGERIAL MOTIVATES

Managers benefit in rank, status and perquisites as the enterprise grows and expands because their salaries, perquisites and status often

increase with the size of the enterprise.

For e.g. acquisition of Satyam by Tech Mahindra.

(7) ACQUISITION BY MANAGEMENT OR LEVERAGED BUYOUTS

The acquisition of a company can be had by the management personnel. It is known as management buyout. This practice is common in

USA for over 25 years and quite in vogue in UK. Management may raise capital from the market or institutions to acquire the company

on the strength of its assets, known as leveraged buyouts.

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Reasons For M&AS

(8) ACQUISITION OF SPECIFIC ASSETS

Acquirer may purchase the specific assets of the acquiree rather than acquiring the whole undertaking with assets and liabilities.

There can be many situations to take over the assets of a company at discount viz.

(i) The acquiree may be in possession of valuable land and property shown at depreciated value/historical costs in books of account

which underestimates the current replacement value. Thus, acquirer shall be benefited by acquiring the assets of the company and

selling them off subsequently;

(ii) To acquire non-profit making company, close down its loss making activities and sell off the profitable sector to make gains;

(iii) The existing management is incapable of utilizing the assets, the acquirer might take over unguarded company and increase its debt

secured on acquiree’s assets.

(9) REDUCING COMPETITION

Many times a company acquires its competitor to increase its market share and increase sales. The best example is Grasim acquisition of

L&T (Cement division).

(10) OTHER REASONS

There may be many other reasons motivating mergers in addition to the above ones viz. profit enhancement for the company, achieving

efficiency, increasing market power, tax and accounting opportunities, growth as a goal and many speculative goals etc. depending upon

the circumstances and prevailing conditions within the company and the economy of the country.

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Reasons For M&As - Summary

Horizontal Merger

Economy of scale

Increased revenue or market share

Synergy

Reduction of competition

Technology up gradation

Tax benefits

Vertical Merger

Cost Advantage

Assured Supply of raw-materials

Lower distribution costs

Conglomerate Mergers

Diversification

Increased speed to market

Overcoming entry barriers

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Example

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Process For M&As

The Process

The beginning : Research, finding the right candidate

Initiating the dialogue : Meetings

Negotiations

The Due Diligence

Arranging the finance

Signing the agreement and closing the deal

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Process For M&As

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Parties Involved In M&As

An Investment Banker to help you find the right candidate and in arriving at the right value of your

target.

An accountant for assistance on the financial side of the transaction.

An M&A attorney who is experienced with such transactions to help you overcome the legal

hurdles.

A tax attorney

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Swap Ratio

The ratio in which an acquiring company will offer its own shares in exchange for the target

company's shares during a merger or acquisition.

For example, if a company offers a swap ratio of 1:1.5, it will provide one share of its own company for every 1.5 shares of the

company being acquired.

To calculate the swap ratio, companies analyze financial ratios such as book value, earnings per share, profits after tax and dividends

paid, as well as other factors, such as the reasons for the merger or acquisition.

The swap ratio determines the control that each group of shareholders of the companies will have over the combined firm. It is an

indicator of relative values of financial and strategic results of the company.

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Swap Ratio: Pre-merger Scenario

PRE-MERGER COMPANY A C OMPANY B

PAT 6,25,000 2,50,000

No. of Shares 2,00,000 1,00,000

EPS 3.125 2.5

P/E Ratio 8 7.5

Market Price/Share 25 18.75

Market Value 50,00,000 18,75,000

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Swap Ratio: Post-merger Scenario Analysis

POST-MERGER SITUATION 1 SITUATION 2

Swap Ratio 2.5:3.125 = 0.8 1:1

PAT 6.25+1.25 = 8.5 8.5

No. of Shares 2.0+0.8 = 2.8 2.0+1.0 =3.0

EPS 8.5/2.8 = 3.125 8.5/3.0 = 2.91

P/E Ratio 8 7.5

Market price/Share 8*3.125 = 25 8*2.91 = 21.825

Total Market Value 25*2.8 = 70,00,000 21.825*3.0 = 65,47,500

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Swap Ratio

CONCLUSION

Exchange at EPS

No effect on EPS after merger

Exchange more than EPS Ratio

Company with lower EPS before merger gains

Exchange less than EPS Ratio

Company with higher EPS before merger gains

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Financing The Deal

Cash vs. Stock transaction

Payment by Cash Payment by Stock

Such transactions are usually termed acquisitions

rather than mergers because the shareholders of the

target company are removed from the picture

Payment in terms of acquiring company’s

stock, issued to the shareholders of the

acquired company at a given ratio

proportional to the valuation of the later.

Acquiring company’s shareholders bear all the

risk.

The risk is shared by the shareholders of

both the companies.

A cash acquisition is usually taxable Capital gains taxes can be avoided.

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M&As: Preventive Measures

Poison Pill

A strategy used by corporations to discourage hostile takeovers by making its stock less attractive to the acquirer. There are two types

of poison pills:

A "flip-in" allows existing shareholders to buy more shares at a discount there by diluting the shares held by the acquirer

A "flip-over" allow stockholders to buy the acquirer's shares at a discounted price after the merger.

Golden Parachute

This measure discourages an unwanted takeover by offering lucrative benefit it's to the current top executives, who may lose their job

if their company is taken over by another firm.

Golden parachutes can be prohibitively expensive for the acquiring firm and, therefore, may make undesirable suitors think twice

before acquiring a company.

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M&As: Reactive Measures

White Knight

If a determined hostile bidder thwarts all defenses, a possible solution is a white knight, a strategic partner that merges with the target

company to add value and increase market capitalization. A good example of this is the acquisition of Bear Stearns by white knight

JPMorgan Chase in 2008

Greenmail

A company may also pursue the greenmail option by buying back its recently acquired stock from the putative raider at a higher price

in order to avoid a takeover.

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Impact of M&As

Impact On Shareholders

The investors may share the risk in case of a stock transaction and may gain or lose depending upon whether the merger or

acquisition adds to the value of the firm (the post-merger fluctuations in share price).

The employees of the target company may be retained or can be fired by the new management.

The customer may stand to gain or lose depending upon whether the expected synergy is realized or not post-merger.

The society at large will gain if the stakeholders benefit at large.

Impact On Management

The management of the existing company is usually retained in case of a merger or a friendly acquisition.

The management of the target company is often replaced in case of a hostile acquisition/takeover.

Impact On Share Price

The Share price post-merger will increase if the merger or the acquisition adds to the value of the existing company and the expected

synergy is realized. For example,

The Share price post-merger will come down if the expected synergy is not realized. For example,

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Pros & Cons of A Merger / Acquisition

Pros

Cons

Increase in sales/revenues. Hidden liabilities of target entity.

Decrease competition and therefore increased market share.

Reduced choice for consumers in oligopoly markets.

Venture into new businesses and markets. Likelihood of job cuts.

Reduction of overcapacity in the industry. Cultural integration/conflict with new management.

Enlarge brand portfolio(e.g. L’Oreal’s takeover of Body shop)

Goodwill often paid in excess for his acquisition.

Increase in economies of scale. The monetary cost to the company for acquisition/merger.

Increased efficiency as a result of corporate synergies

Lack of motivation for employees in the company being bought up.

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Accounting for Merger/Acquisition

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Accounting for M&As

Acquisitions can be accounted for using two methods, acquisition (purchase) and merger (pooling).

When the pooling of interest method is used, the balance sheets of the two businesses are combined and no goodwill is created.

Because a merger transaction does not create goodwill, acquisition-related amortisation expenses do not impact pro forma earnings.

When the purchase method is used, the acquiring company will put the premium they paid for the other company on their balance sheet under the "Goodwill" category.

Accounting rules require the goodwill be amortized over the course of 40 years and will show amortization expenses related to goodwill, lowering down the reported pro forma earnings.

Under, USGAAP and IFRS(FAS 141), pooling-of-interests method is no longer allowed.

As the consolidated income statement in subsequent periods, in the purchase method will show amortization expenses related to goodwill, and, therefore will lead to lower reported Earnings, as a concession, the FASB will no longer require goodwill to be written off unless the assets became impaired. Goodwill can now only be impaired under these standards.

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Two Types Of Merger Accounting

Purchase Method Pooling method

The Business deal A buys B A buys B

Accounting deal A buys B A buys B

How the accountants treat thetransaction

A buys B's assets A and B 'pool' their assets

Essential accounting differences Acquisition costs are capitalized Acquisition costs are expensed

Goodwill No goodwill

Combine financial results from the date ofmerger

Combine financial results for the entireperiod reported

Consideration No restrictions on type of consideration Certain restrictions on type ofconsiderations, typically 90% stock

Asset deal versus share deal Can buy shares or assets Can Only buy shares

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Asset vs Stock Acquisition

A buyer may structure an acquisition as either an asset purchase or a stock purchase. The buyer's tax basis in acquired assets and liabilities depends, in part, on whether the transaction is structured as an asset or a stock sale.

Asset acquisition

The acquirer buys some or all of the target's assets/liabilities directly from the seller. If all assets are acquired, the target is liquidated.

Stock acquisition

The acquirer buys the target's stock of from the selling shareholders.

Note that in a stock sale, the sellers are the target's shareholders (which may be a corporate entity). In an asset sale, the seller is a corporate entity.

So, the type of acquisition will determine who pays taxes on the transaction and the amount of taxes to be paid based on the tax rate applicable to the seller.

Do not confuse the type of acquisition with the form of consideration. A buyer may use either cash or stock (or a combination thereof) as consideration for the assets or stock of the target.

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Asset acquisition

In an asset sale, individually identified assets and liabilities of the seller are sold to the acquirer.

A major tax advantage to the acquirer of structuring a transaction as a taxable asset purchase is that the acquirer receives stepped-up tax basis in the target's net assets (assets minus liabilities).

In a taxable asset sale, the seller pays tax on any gain on the sale of its assets.

Stock Acquisitions

In a stock purchase, all of the assets and liabilities of the seller are sold upon transfer of the seller's stock to the acquirer.

The acquirer does not receive a stepped-up tax basis in the acquired net assets but, rather, a carryover basis. Any goodwill created in a stock acquisition is not tax-deductible.

However, if an Internal Revenue Code (IRC) Section 338 election is made by the acquirer (or jointly by the acquirer and seller), the stock sale is treated as an asset sale for tax purposes.

In an asset acquisition, net assets are written up for both book and tax purposes. In a stock acquisition, on the other hand, net assets are written up for book purposes but not for tax purposes, giving rise to a DTL.

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Note that sellers typically prefer stock transactions, because

They avoid ‘double taxation’ (i.e. At the corporate level and at the shareholder level) and

Limit ongoing liabilities from the business.

Buyers typically prefer asset transactions, in part, because they:

Receive a step-up in the tax basis of the assets and, as a result, higher tax-deductible depreciation expense;

Might receive favorable goodwill tax treatment, and

Limit corporate liabilities which they acquire with the business.

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Asset vs Stock Deal

Asset Deal Stock Deal

Assets / Liabilities

Acquirer can "cherry pick" wanted assets/liabilities, avoiding unwanted liabilities. However, some assets cannot be transferred easily without third party consents.

All liabilities transfer to the buyer by operation of law, wanted or not. However, the buyer can contractually allocate liabilities to the seller by selling them back.

Complexity / Cost

Complex and costly process that requires identification, valuation, and title transfer of individual assets.

Relatively inexpensive and easy to execute.

Taxes If the target liquidates, then there are two level of tax, at the corporate level and again at the shareholder level when the liquidation proceeds are distributed.

Only one level of tax–at the shareholder level.

Tax Basis The buyer's basis in the acquired assets is stepped up to the purchase price (FMV).

The buyer's basis in the acquired stock is stepped up to the purchase price (FMV). The buyer assumes a carryover basis in the acquired assets.

Goodwill Tax-deductible and amortized over 15 years for tax purposes under IRC Section 197.

Not tax-deductible.

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Combination Model Overview

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Combination analysis

Combination analysis is an important tool used in evaluating mergers and acquisitions.

Combination analysis is often used in M&A for mergers of equals between two public companies or when a public company purchases a business (public or not) for cash/stock/debt/mix of considerations.

It creates a profile of the combined company and the credibility of a proposed combination is based on how and by how much the pro forma combined entity has changed from the standalone positions, based on several metrics that should be included in a combination model.

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Typical uses

Combination analysis is useful, as it presents a transaction’s impact on a public company.

The analysis can be used to gauge the potential market reaction to a combination based on the impact on EPS, cash flow per share, credit ratios, and ultimate ownership of the pro forma entity.

The majority of models provide sensitivity analysis to view how key measures are affected should certain factors be varied.

Sell side applications

Choosing the best buyers to approach

Determining what prices potential buyers might be willing to pay

Buy side applications

Determining how much your client can afford to pay for a potential acquisition

Analyzing capital structure impact of potential acquisitions

Assessing potential market reaction and debt ratings impact of an acquisition

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Building a Combination Model

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As the majority of M&A transactions will be acquisitions, and hence subject to purchase accounting, the building of a combination model will focus only on acquisition/purchase method.

1. Base data (both target and acquirer)

Underlying financials (i.e. brokers or management)

Company’s outstanding shares/options, ownership

Market data (e.g. interest and exchange rates)

2. Sources and uses of funds

3. Accounting/business adjustments (e.g. financing costs, synergies)

4. Scope of the output

Simple EPS, CFPS accretion/ (dilution)

EPS, CFPS accretion/ (dilution) and LTM pro forma ratios

Full merger model with P&L, BS and CF impacts

Analyzing the results/sensitivities

Presenting the results

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Key Inputs

The first step in building a combination model is to populate it with the required inputs. Whatever the format of the model, the key starting inputs remain the same:

Variable Hints/issues Source

Stock price Use dosing price Data stream Bloomberg

Forecast average shares Use latest shares outstanding as a proxy for base

Annual report or interim, Bloomberg Check for any share issues, buyouts since then.

Purchase premium Use a rounded number Industry specific

Transaction comps

Synergy(revenue enhancements/cost savings)

Often expressed as percentage of target’s sales or EBITDA

Cost saving comps

Interest rate, exchange rate Relevant 5-year government benchmark and spread

Data stream, Bloomberg, Financial Times

Financials/EPS forecast Differentiate between forecasts and consensus – common sense is required to decide on ‘suitable’ forecasts

Research Reports, Analyst research

Options outstanding Do not confuse with exercisable options Annual report (note)

Average option price Take an average of low and high Annual report (note) LTM dividend payout ratio

Dividend payout Analyst estimates

Transaction costs Estimate of M&A /legal fees and miscellaneous costs

Transaction costs comps

Asset write-ups Generally assumed to be zero in Simple models, Industry specific

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Transaction Assumptions

One of the key stages in building a combination model is in deciding on the transaction assumptions. All the key drivers that determine the structure of a transaction should be presented clearly including:

Purchase price/bid premium

Offer structure (e.g. cash or shares)

Transaction expenses

Interest rates on debt

Marginal tax rate for combined

Share exchange ratio (if applicable) and share issuance factors

Accounting treatment of transaction (purchase or pooling)

Goodwill calculation (when purchase accounting is used)

The period of goodwill amortization

Calculation of synergies

Any transaction-specific issues

Credit ratios (to maintain)

Implied transaction multiples (to maintain)

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Create a Pro Forma Profit and Loss Account

In preparing the profit and loss account, the profit and loss items of both companies can generally be added together. However, adjustments will be required for the following:

• Synergies

• Goodwill amortization

• Interest costs on acquisition debt (and fees)

• Tax on the above items (note that goodwill amortization is generally not tax deductible in most countries, although it is taxdeductible in Germany)

• Number of shares (if acquirer’s shares used as acquisition currency)

The steps required to complete the pro forma profit and loss account are as follows:

1. Lay out the stand-alone profit and loss account of each company

2. Create an additional column for transaction adjustments.

• Enter the appropriate adjustments, including (if applicable) annual goodwill amortized, ‘additional’ interest/expense, synergies assumed, and the appropriate tax charge for the adjustments.

• Remember that in any case where stock is part of the transaction currency, the number of shares will increase.

3. Add a fourth column which sums the two stand-alone profit and loss accounts along with the transaction adjustments

From the P&L format, the acquirer’s standalone position and the pro forma position would allow for EPS accretion/(dilution) analysis to be performed.

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Create a Pro Forma Balance Sheet

The steps required to complete the pro forma balance sheet are as follows:

1. Lay out the standalone balance sheet of each company, making sure that each account is properly lined up (e.g. accounts receivable for one company corresponds to accounts receivable for the other)

2. Create an additional column for transaction adjustments.

Enter the appropriate adjustments from the assumptions made including (if applicable) annual goodwill amortized, ‘additional’ interest/expense, synergies assumed, and the appropriate tax charge for the adjustments.

Remember that in any case where stock is part of the transaction currency, the adjustment to shareholders’ equity is a two-step process:

• The purchase and elimination of existing equity

• The issuance of new equity

3. Add a fourth column which sums the two stand-alone balance sheets along with the transaction adjustments. This column will contain the pro forma balance sheet

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Building a Combination Model - Adjustments

Synergies need to be wired into the income statements from the assumptions and included in the combined sales or EBITDA (depending on the assumption). As synergies might be difficult to forecast, it has proved helpful to create data tables with varying levels of synergies and acquisition prices to assess the earnings impact

An Depreciation/ amortization schedule (roughly analogous to a PP&E schedule) needs to be created, then:

Annual incremental Depreciation/ amortization needs to be added to both the income statement and the cash flow statements

The ending balances on amortization schedule must be reflected on the balance sheet

Interest costs on acquisition debt (which may include fees) should be included in the profit and loss account. The debt should also be included in the balance sheet

Include taxation on your adjustments in the profit and loss account and balance sheet

Merger expenses together with interest costs on these expenses going forward, should be expensed as incurred.

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Building a Combination Model - Adjustments

Capex and asset sales should be wired into the combined cash flow statement

New shareholders’ equity and PP&E schedules should be created for the combined entity and connected to the combined balance sheet

If shares are used in the funding mix for the acquisition, this must be reflected in the P&L for per share metrics and calculations

Dividends must be adjusted to include any increases in shares outstanding and reflected on the cash flow statement. This adjustment is frequently neglected.

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Accretion/(dilution)

Accretion/ (dilution) analysis measures percentage change (of a particular item) pre and post transaction on a per share basis.

It is used to evaluate the impact of a combination on the shareholders of the acquirer and target. In turn, it can be used to assess the market reaction and the acceptance of a transaction by shareholders as it would be made transparent whether the deal adds shareholder value.

Accretion/ (dilution) are most typically applied to earnings per share.

Accretion/ (dilution) analyses can also be applied to non-financial items (e.g. mineral reserves and production). The usual items that stem from accretion/ (dilution) include:

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Accretion/(dilution)

How is it calculated?

The calculation of accretion/ (dilution) is as follows:

Accretion/ (dilution) analysis for EPS enhancement should be included in pro forma profit and loss summary.

Some models include a calculation which shows post-tax synergies required to make the transaction earnings neutral.

This is particularly important where the transaction is dilutive, since it provides an understanding of the addition synergies required in order to make a transaction feasible. This calculation is made as follows:

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𝑽𝒂𝒍𝒖𝒆𝒑𝒆𝒓𝒔𝒉𝒂𝒓𝒆𝒑𝒐𝒔𝒕𝒕𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏 − 𝑽𝒂𝒍𝒖𝒆𝒑𝒆𝒓𝒔𝒉𝒂𝒓𝒆𝒑𝒓𝒆𝒕𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏

𝑽𝒂𝒍𝒖𝒆𝒔𝒉𝒂𝒓𝒆𝒑𝒓𝒆𝒕𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏

𝑺𝒚𝒏𝒆𝒓𝒈𝒊𝒆𝒔𝒇𝒐𝒓𝑬𝑷𝑺𝒏𝒆𝒖𝒕𝒓𝒂𝒍𝒕𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏

= 𝑬𝑷𝑺𝒑𝒓𝒆𝒂𝒄𝒒𝒖𝒊𝒔𝒊𝒕𝒊𝒐𝒏−𝑬𝑷𝑺𝒑𝒐𝒔𝒕𝒂𝒄𝒒𝒖𝒊𝒔𝒊𝒕𝒊𝒐𝒏 × (𝑽𝒂𝒍𝒖𝒆𝒑𝒆𝒓𝒔𝒉𝒂𝒓𝒆𝒑𝒓𝒆𝒕𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏)

(𝑽𝒂𝒍𝒖𝒆𝒑𝒆𝒓𝒔𝒉𝒂𝒓𝒆𝒑𝒓𝒆𝒕𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏)

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Sensitivity analysis

Once a base case is established, a combination analysis should always be tested under various sensitivity scenarios.

Testing involves examining the incremental effect of various changes in assumptions like

Differing levels of synergies,

Various equity/debt funding mixes,

Changes in bid premium,

Factoring in fees,

Various interest rates on new debt,

Thought and common sense should be employed in developing reasonable and useful sensitivity cases. The result of these cases should be attached to the merger model in a clear, concise format.

M &

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Cautionary notes

Much of the process of building a combination model is mechanical and will quickly become routine. However, keep a few cautionary notes in mind.

Clearly note any key assumptions and model drivers

Where possible provide support schedules which show the actual mechanics of the combination. This helps eliminate mistakes and facilitates checking

Be conscious of model structure and format. The easier is it to understand and check the model’s mechanics, the less likely it is mistakes will be made

Identify (by coloring/protecting) those cells which are hard-coded inputs

Anticipate running a variety of scenarios (different accounting treatment, acquisition currency, capital structure, purchase price, etc.) and make the model architecture flexible.

It is often appropriate to calendars the financial statements of the companies if they do not share the same financial year end

Take care when aggregating the financial statements for two companies. Certain adjustments often cause error, for example, in relation to share capital and goodwill

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Introduction to M&A

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