...
The valuation School
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:
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LEARN
INVESTMENT BANKING
DEAL LIFECYCLE
STEPSI
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value
The
school
1. IB send "TEASER"
- first step of buy side MPA
Teaser is one-two
pager summary
-
of potential sales process.
-
Doesn't include Name of Target
maintain
to confidentiality.
usp of
Includes
target.
-
objective-value of company to be
understood by larger Audience
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value
The
school
NDA
2. Signing the
- NDA= Non Disclosure Agreement.
-once teaser is reviewed by potential
buyer, and they decide to explore
the opportunity.
-
Next step in transaction
is to sign
an NDA to maintain confidentality.
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value
The
school
3. I sends aim to
Buyer
- cim= confidential into memorandum
-
In this, IB shares complete inform
about the seller company disclosing
the
identity.
- am contains Investment thesis of co,
overview of company, sector, product&
services, Employee profiles, Revenue profile.
-
Aso contain financial Information
<Both historical &
projections
->
· The
valueschool
4. Faciliating management calls.
- once
buyers start
looking ataim
-
They usually need to seek clarification
from the
management of
selling co.
-
IB faciliates this call.
-
Discussion is
mostly around company's
capabilitus, relevance of financial project I
with customer etc.
Capex, Relationship
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value
The
school
5. Valuation and modeling
IB behalf of buying
on
company
-
Info read
-
Based on
through
cim and management calls
Perform valuation based an
agreed
projection.
of
-
objective -
come to a
range
valuation to start Negotiation.
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value
The
school
6. Expression of Interest/Non binding after
-
Expression of Interest (EOI) is formal
often
indicating serious Interest
from the
buyer.
-
Interest to acquire business of
seller co.
by paying a certain valuation
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value
The
school
7. Access to Data room
offer is accepted sellerco.
-once
by
-
IB opens Dataroom for Buyer co.
-
Data Room is virtual data drive
clike
Google drives for
exchanging the
data related to deal.
Access to data Room is
closely tracked
-
and
logged to maintain
confidentiality.
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value
The
school
with
8. In person meeting Mgmt
-
In this step, IB faciliate in person
meet between
mgmt
of
buying co.
and
selling co.
usually, defined spoc(single
point of contactfrom both the
parties attend this meeting.
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value
The
school
9. Letter of Intent.
-
Lot is a document
declaring
commitment of seller co. to do
Business (deal) with buyer co
-
It is intent to into
enter
legally
binding agreement.
It outlines terms and conditions
key
-
of the deal.
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value
The
school
10. Start of period 3 final
exclusivity
Due
Diligence
-
Exclusivity period-length of time (30-60
Days
which seller is prohibited
during from
activities that
carrying out
or
furthering
-
related to sale of firm
with whom letter
- other then
buyer
of Intent was
signed.
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value
The
school
II. Quality of
earning Report
- It is one of the outcome of final
Due
Diligence.
- It assesses how seller co. accumulates
its revenue -
such as cash, noncash,
recurring, non
recouring.
- These
key details
generally
are not
outlined in Income statement..
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value
The
school
12. Definitive Agreement (SPA/APAS
-
stock purchase Agreement (SPA)
that finalizes
It is definitive agreement
all terms and conditions related to purchase
and sale of co's shares
including title
to Assets & liabilities.
- Asset Purchase Agreement (APA)
This is agreement with terms and condition
for sale of Assets of company.
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value
The
school
13. Public Announcement & Exchange
disclosure.
-
This is final step in which deal is
announced in media for knowledge
of
larger public.
- Disclosure and approvals files to
and
Exchanges, Regulators.
-
14. How do you know all this?
-
Because,I follow Parth Verma
on linked in
all
-
can
diligently follow his
Sessions on "financial
modeling and
valuations"- where?
the valuation school
*
wip.
i
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