Mergers and Acquisitions Playbook: Lessons from the Middle-Market Trenches (Wiley Professional Advisory Services)

309 Pages·2010·2.36 MB·English

by  Mark A. Filippell

Table of Contents

Cover

Table of Contents

Half title page

Title page

Copyright page

Dedication

Preface: The Uneven Playing Field

Acknowledgments

CHAPTER 1 Why People Sell Businesses

HONESTY IS THE BEST POLICY

MOST COMMON REASONS PEOPLE SELL

PROACTIVELY MAKING THE SALE DECISION

CHAPTER 2 Should the Seller Hire an Intermediary?

WHAT DO INVESTMENT BANKERS DO, ANYWAY?

CRITERIA FOR SELECTING AN INVESTMENT BANKER

INVESTMENT BANKER FEES

CHOOSING THE RIGHT INVESTMENT BANKER
CHAPTER 3 What Is the Business Worth?

VALUATION METHODOLOGIES

APPLYING VALUATION THEORY TO REAL-WORLD
SITUATIONS

CHAPTER 4 The Difference between “Value” and
“Currency”

MEDIUMS OF EXCHANGE IN M&A

SALE OF A COMPANY’S STOCK

CHAPTER 5 Taking Advantage of the Seller’s Unfair
Advantages: Prepping and Timing

PREPARATION

TIMING

INVOLVING THE MANAGEMENT TEAM

(NOT) INVOLVING COMPANY EMPLOYEES

INFORMING THE WORKFORCE

DEALING WITH LEAKS

CONCLUSION

CHAPTER 6 Preparing the Documents

THE OFFERING MEMORANDUM

THE EXECUTIVE SUMMARY

THE MANAGEMENT PRESENTATION

THE DATA ROOM

THE DEFINITIVE PURCHASE AGREEMENT

CHAPTER 7 Identifying and Cultivating the Right
Buyers

STRATEGIC BUYERS

FINANCIAL SPONSORS

DIVERSIFICATION PARTIES

EMPLOYEE STOCK OWNERSHIP PLANS

MANAGEMENT

FAMILY MEMBERS

CHAPTER 8 How Many Buyers to Approach?

NEGOTIATED SALE

LIMITED AUCTION

BROAD AUCTION

CHAPTER 9 Approaching Prospective Buyers

CONFIDENTIALITY

DISTRIBUTING THE OFFERING MEMORANDUM TO
BUYERS

SECURING BUYERS’ INDICATIONS OF INTEREST

APPENDIX 9A: CONFIDENTIALITY AGREEMENT

APPENDIX 9B: SAMPLE PROCESS LETTER

APPENDIX 9C: INDICATION OF INTEREST

CHAPTER 10 Management Presentations and Plant
Tours

MANAGEMENT PRESENTATIONS

FACILITY TOURS

NEXT STEPS
CHAPTER 11 Negotiating the Purchase Price

THE LETTER OF INTENT

CASE-SPECIFIC NEGOTIATING STRATEGIES

NEGOTIATING DYNAMICS

APPENDIX 11A: LETTER OF INTENT

CHAPTER 12 Moving from Letter of Intent to Closing

THE NEGOTIATING DYNAMICS HAVE REVERSED

HART-SCOTT-RODINO FILING

KEEPING THE CLOSING PROCESS ON TRACK

WHAT IF IT’S NOT MEANT TO BE?

APPENDIX 12A: DEFINITIVE PURCHASE AGREEMENT

CHAPTER 13 Sales Forced by Bankruptcy or
Financial Duress

THE PAINFUL DECISION TO ACT

SECURED PARTY SALES

SALES ENGINEERED BEFORE FILING, BUT CLOSED IN
BANKRUPTCY COURT

SALES ENGINEERED AND CLOSED IN BANKRUPTCY
COURT

CHAPTER 14 Working with Lawyers

LEGAL INVOLVEMENT FROM DAY ONE

THE LAWYER’S DISTINCT ROLE

DEAL MAKERS VERSUS DEAL BREAKERS

RETAINING THE RIGHT M&A LAWYER

THE LEGAL CHECKUP
COLLABORATING WITH THE INVESTMENT BANKER

DRAFTING AND NEGOTIATING THE PURCHASE
AGREEMENT

EFFECTIVE VERSUS INEFFECTIVE LAWYERING

MANAGING THE M&A LAWYER

APPENDIX 14A: SELLER’S ATTORNEY
PRETRANSACTION CHECKLIST

CHAPTER 15 After the Sale Has Closed

POST-CLOSING IMMEDIATE COOPERATION

POST-CLOSING SUBSEQUENT MATTERS

POST-CLOSING FINANCIAL MATTERS

NEW HORIZONS

LEVELING THE PLAYING FIELD

About the Author

Index
Mergers and Acquisitions Playbook

Copyright © 2011 by Mark A. Filippell. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying,
recording, scanning, or otherwise, except as permitted under Section 107 or 108
of the 1976 United States Copyright Act, without either the prior written
permission of the Publisher, or authorization through payment of the appropriate
per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive,
Danvers, MA 01923, [phone], fax [phone], or on the Web at
www.copyright.com. Requests to the Publisher for permission should be
addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River
Street, Hoboken, NJ 07030, [phone], fax [phone], or online at
http: www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have
used their best efforts in preparing this book, they make no representations or
warranties with respect to the accuracy or completeness of the contents of this
book and specifically disclaim any implied warranties of merchantability or
fitness for a particular purpose. No warranty may be created or extended by sales
representatives or written sales materials. The advice and strategies contained
herein may not be suitable for your situation. You should consult with a
professional where appropriate. Neither the publisher nor author shall be liable
for any loss of profit or any other commercial damages, including but not limited
to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical
support, please contact our Customer Care Department within the United States
at [phone], outside the United States at [phone] or fax (317) 572-
4002.
Wiley also publishes its books in a variety of electronic formats. Some content
that appears in print may not be available in electronic books. For more
information about Wiley products, visit our Web site at www.wiley.com.

Library of Congress Cataloging-in-Publication Data:
Filippell, Mark A., 1953–
Mergers and acquisitions playbook : lessons from the middle-market trenches
Mark A. Filippell.
p. cm.—(Wiley professional advisory services ; 3)
Includes index.
ISBN 978-0-470-62753-2 (hardback); ISBN 978-0-470-91860-9 (ebk); ISBN
978-0-470-91861-6 (ebk); 978-0-470-91862-3 (ebk)
1. Sale of business enterprises. 2. Consolidation and merger of
corporations. I. Title.
HD1393.25.F55 2010
658.1′62–dc22
2010023276