并购整合估价

MBA1Finance资料仅供参考,不当之处，请联系改正。ValuationasaTool Weencountervaluationinmanysituations: Mergers&Acquisitions LeveragedBuy-outs(LBOs&MBOs) Sell-offs,spin-offs,divestitures Investorsbuyingaminorityinterestincompany Initialpublicofferings Howdoweestablishvalueofassets? Objectivetoday:TopreviewvaluationmethodsusedmostcommonlyinpracticeMBA1Finance资料仅供参考,不当之处，请联系改正。BusinessValuationTechniques Discountedcashflow(DCF)approaches Dividenddiscountmodel Freecashflowstoequitymodel(directapproach) Freecashflowstothefirmmodel(indirectapproach) Relativevaluationapproaches P/E(capitalizationofearnings) EnterpriseValue/EBITDA Other:P/CF,P/B,P/S Controltransactionbasedmodels(e.g.valuebasedonacquisitionpremiaof“similar”transactions)MBA1Finance资料仅供参考,不当之处，请联系改正。DiscountedCashFlowValuation Whatcashflowtodiscount? Investorsinstockreceivedividends,orperiodiccashdistributionsfromthefirm,andcapitalgainsonre-saleofstockinfuture Ifinvestorbuysandholdsstockforever,alltheyreceivearedividends Individenddiscountmodel(DDM),analystsforecastfuturedividendsforacompanyanddiscountattherequiredequityreturn Problemwithdividends:theyare“managed”MBA1Finance资料仅供参考,不当之处，请联系改正。Dividends:TheStabilityFactorFactorsthatinfluencedividends: Desireforstability Futureinvestmentneeds Taxfactors SignalingprerogativesDividendchanges:PubliclytradedU.S.FirmsSource:A.Damodaran,InvestmentValuation,Wiley,1997MBA1Finance资料仅供参考,不当之处，请联系改正。Valuation:BacktoFirstPrinciples Valueofthefirm=valueoffixedclaims(debt)+valueofequity Howdomanagersaddtoequityvalue? Bytakingonprojectswithpositivenetpresentvalue(NPV) Equityvalue= equitycapitalprovided+NPVoffutureprojects Note:Markettobookratio(or“Tobin’sQ”ratio)>1ifmarketexpectsfirmtotakeonpositiveNPVprojects(i.e.firmhassignificant“growthopportunities”)MBA1Finance资料仅供参考,不当之处，请联系改正。Valuation:FirstPrinciples Totalvalueofthefirm =debtcapitalprovided+equitycapitalprovided +NPVofallfutureprojectsprojectforthefirm =uninvestedcapital+ presentvalueofcashflowsfromallfuture projectsforthefirm Note:ThisrecognizesthatnotallcapitalmaybecurrentlyusedtoinvestinprojectsMBA1Finance资料仅供参考,不当之处，请联系改正。TheValuationProcess Identifycashflowsavailabletoallstakeholders Computepresentvalueofcashflows Discountthecashflowsatthefirm’sweightedaveragecostofcapital(WACC) Thepresentvalueoffuturecashflowsisreferredtoas: Valueofthefirm’sinvestedcapital,or Valueof“operatingassets”or“TotalEnterpriseValue”(TEV)MBA1Finance资料仅供参考,不当之处，请联系改正。TheValuationProcess,continued Valueofallthefirm’sassets(orvalueof“thefirm”)=Vfirm=TEV+thevalueofuninvestedcapital Uninvestedcapitalincludes: assetsnotrequired(“redundantassets”) “excess”cash(notneededforday-to-dayoperations) Valueofthefirm’sequity =Vequity=Vfirm-Vdebt whereVdebtisvalueoffixedobligations(primarilydebt)MBA1Finance资料仅供参考,不当之处，请联系改正。TotalEnterpriseValue(TEV) Formostfirms,themostsignificantitemofuninvestedcapitaliscash Vfirm=Vequity+Vdebt=TEV+cash TEV=Vequity+Vdebt-cash TEV=Vequity+Netdebt whereNetdebtisdebt-cash(note:thisassumesall cashis“excess”)MBA1Finance资料仅供参考,不当之处，请联系改正。MeasuringCashFlows FreeCashFlowtotheFirm(FCFF) representscashflowstowhichallstakeholdersmakeclaim FCFF=EBIT(1-taxrate) +Depreciationandamortization(noncashitems) -CapitalExpenditures -IncreaseinWorkingCapital Whatisworkingcapital? Non-cashcurrentassets-non-interestbearingcurrentliabilities(e.g.A/P&accruedliab.)MBA1Finance资料仅供参考,不当之处，请联系改正。WorkingCapitalvs.PermanentFinancingShort-termassetsShort-termliabilitiesPermanentCapitalLong-termassetsPermanentCapitalOperatingassetsWorkingcapitalPermanentcapitalmayinclude“current”itemssuchasbankloansifdebtislikelytoremainonthebooksKey:TreatitemsaseitherworkingcapitalpermanentcapitalbutnotbothUninvestedcapitalMBA1Finance资料仅供参考,不当之处，请联系改正。FCFFvs.AccountingCashFlowsIncomeStatement,Hudson’sBay($millions,FYEJan1999)Sales $7,075CostofGoodsSold $6,719EBITDA $356Depreciation $169EBIT $187InterestExpense $97IncomeTaxes $50NetIncome $40Dividends $53CashFlowStatement,Hudson’sBay,($millions,FYEJan1999)CashflowfromoperationsNetIncome $40Non-cashexpenses $169ChangesinWC ($116)Cashprovided(used)byinvestmentsAdditionstoP,P&E ($719)Cashprovided(used)byfinancing Additions(reductions)todebt $259Additions(reductions)toequity $356Dividends ($53)OverallNetCashFlows ($64)Hudson’sBayFCFF=187*(1-0.44)+169-719-116=($561)MBA1Finance资料仅供参考,不当之处，请联系改正。CashFlowDefinitionIssuesHowisFCFFdifferentthanaccountingcashflows? Operatingcashflowsincludesinterestpaid Wewanttoidentifycashflowsbeforetheyareallocatedtoclaimholders FCFFalsoappearstomisstaxsavingsduetodebt Key:thesetaxsavingsareaccountedforinWACCMBA1Finance资料仅供参考,不当之处，请联系改正。AnExample $1millioncapitalrequiredtostartfirm Capitalstructure: 20%debt(10%pre-taxrequiredreturn) 10%preferreddebt(7%requiredreturn) 70%equity(15%requiredreturn) taxrateis50% firmexpectstogenerate244,000EBITinperpetuity futurecapitalexpendituresjustoffsetdepreciation nofutureadditionalworkingcapitalinvestmentsarerequired Whatshouldbethevalueofthisfirm?MBA1Finance资料仅供参考,不当之处，请联系改正。AnExample,continued AftertaxWACCis12.2%sopre-taxWACCis24.4% EBIT/capitalisalso24.4%,soNPVoffutureprojectsforthisfirmiszero Valueoffirmshouldequal$1million(investedcapital) FCFF=EBIT*(1-t)=$122,000 Value=122,000/0.122=$1,000,000MBA1Finance资料仅供参考,不当之处，请联系改正。TwoStageFCFFValuation Impossibletoforecastcashflowindefinitelyintothefuturewithaccuracy Typicalsolution:breakfutureinto“stages” Stage1:firmexperienceshighgrowth Sourcesofextraordinarygrowth: productsegmentation lowcostproducer Periodofextraordinarygrowth: basedoncompetitiveanalysis/industryanalysis Stage2:firmexperiencesstablegrowthMBA1Finance资料仅供参考,不当之处，请联系改正。Stage1Valuation ForecastannualFCFFasfarasfirmexpectstoexperienceextraordinarygrowth generallysalesdrivenforecastsbasedonhistoricalgrowthratesoranalystforecasts EBIT,capitalexpenditures,workingcapitalgivenasapercentageofsales DiscountFCFFatthefirm’sWACC(kc)FCFF1+FCFF2+...+FCFFt1+kc(1+kc)2(1+kc)tVALUE1=MBA1Finance资料仅供参考,不当之处，请联系改正。Stage2Valuation StartwithlastFCFFinStage1 Assumethatcashflowwillgrowatconstantrateinperpetuity InitialFCFFofStage2mayneedadjustmentiflastcashflowofStage1is“unusual” spikeinsalesorotheritems capitalexpendituresshouldbeclosetodepreciation Value1yearbeforeStage2begins=FCFFt*(1+g)Kc-gMBA1Finance资料仅供参考,不当之处，请联系改正。Stage2ValuationPresentvalueofStage2cashflows(TerminalValueorTV): Keyissueinimplementation:Terminalgrowth(g) rateof“stable”growthintheeconomy(realrateofreturn~1-2%plusinflation) TEV=VALUEt+TV1(1+kc)txTV=FCFFt*(1+g)Kc-gMBA1Finance资料仅供参考,不当之处，请联系改正。DiscountedFCFFExampleAssumptions Year EBIT Dep CapEx W/CChange 1 40462 2 50573 3 60684 Taxrate=40% kc=10% Vdebt=valueofdebt=$100 Growth(g)ofFCFFsbeyondyear3=3%MBA1Finance资料仅供参考,不当之处，请联系改正。DiscountedFCFFExample(cont’d)FCFF=EBIT*(1-t)+Dep-CapEx-IncreaseinWC Year1FCFF=40*(1-0.4)+4-6-2=20 Year2FCFF=50*(1-0.4)+5-7-3=25 Year3FCFF=60*(1-0.4)+6-8-4=30MBA1Finance资料仅供参考,不当之处，请联系改正。DiscountedFCFFExample(cont’d)20253030*(1+g)30*(1+g)2|||||| t=012345P=Vfirm 30*(1+g)/(kc-g)TEV=20/(1+kc)+25/(1+kc)2+30/(1+kc)3+[30*(1+g)/(kc-g)]/(1+kc)3MBA1Finance资料仅供参考,不当之处，请联系改正。DiscountedFCFFExample(cont’d)TEV=20/(1.10)+25/(1.10)2+30/(1.10)3+[30*(1.03)/(0.10-0.03)]/(1.10)3 =18.2+20.7+22.5+331.7=393.0 TEV+Cash=Vfirm==>Vfirm=TEV=393.0 Vfirm=Vdebt+Vequity==>Vequity=Vfirm-Vdebt Vequity=393.0-100.0=293.0MBA1Finance资料仅供参考,不当之处，请联系改正。RelativeValuationApproachesMBA1Finance资料仅供参考,不当之处，请联系改正。CapitalizationofEarnings Computetheratioofstockpricetoforecastedearningsfor“comparable”firms determineanappropriate“P/Emultiple” IfEPS1istheexpectedearningsforfirmwearevaluing,thenthepriceofthefirm(P)shouldbesuchthat: P/EPS1=“P/Emultiple” Rearranging, P=“P/Emultiple”xEPS1MBA1Finance资料仅供参考,不当之处，请联系改正。P/ERatiosandtheDDM RecalltheconstantgrowthDDMmodel,butapplyittoafirmwith100%payoutratio:P/EratioscapturetheinherentgrowthprospectsofthefirmandtherisksembeddedindiscountrateP/EMotto:GrowthisGood,RiskisRottenP=D1ke-gP=EPS1ke-gP=1EPS1ke-gMBA1Finance资料仅供参考,不当之处，请联系改正。P/ERatioBasedValuation Fundamentally,the“P/Emultiple”relatestogrowthandriskofunderlyingcashflowsforfirm Key:identificationof“comparable”firms similarindustry,growthprospects,risk,leverage industryaverageMBA1Finance资料仅供参考,不当之处，请联系改正。TEV/EBITDAApproach TEV=MVequity+MVdebt-cash EBITDA:earningsbeforetaxes,interest,depreciation&amortization ComputetheratioofTEVtoforecastedEBITDAfor“comparable”firms determineanappropriate“TEV/EBITDAmultiple” IfEBITDA1istheexpectedearningsforfirmwearevaluing,thentheTEVforthefirmshouldbesuchthat: TEV/EBITDA1=“EV/EBITDAmultiple”MBA1Finance资料仅供参考,不当之处，请联系改正。TEV/EBITDAApproach Rearranging: TEV=“EV/EBITDAmultiple”xEBITDA1 Nextsolveforequityvalueusing: MVequity=TEV-MVdebt+cash Multiplesagaindeterminedfrom“comparable”firms similarissuesasintheapplicationofP/Emultiples leveragelessimportantconcernMBA1Finance资料仅供参考,不当之处，请联系改正。OtherMultipleBasedApproaches Othermultiples: PricetoCashFlow:P=“P/CFmultiple”XCF1 PricetoRevenue:P=“P/Revmultiple”XREV1 Multipleagaindeterminedfrom“comparable”firms Whywouldyouconsiderpricetorevenueover,forexample,pricetoearnings?MBA1Finance资料仅供参考,不当之处，请联系改正。MergerMethods Comparabletransactions: Identifyrecenttransactionsthatare“similar” Ratio-basedvaluation Lookatratiostopricepaidintransactiontovarioustargetfinancials(earnings,EBITDA,sales,etc.) Ratioshouldbesimilarinthistransaction Premiumpaidanalysis Lookatpremiumsinrecentmergertransactions(pricepaidtorecentstockprice) PremiumshouldbesimilarinthistransactionMBA1Finance资料仅供参考,不当之处，请联系改正。ValuationCaseProcess Size-upthefirmbeingvalued doprojectionsseemrealistic(lookatpastgrowthrates,pastratiostosales,etc.)? whatarethekeyrisks? Valuationanalysis severalapproaches+sensitivities(tiedtorisks) Addresscasespecificissues e.g.forM&A:whatisfit(size-upbidder),anysynergies,biddingstrategy,structuringthetransaction,etc. e.g.forcapitalraising:timing,dealstructure,etc.MBA1Finance资料仅供参考,不当之处，请联系改正。TheValuation“Myths”Likeallanalyticaldisciplines,valuationhasdevelopeditsownsetofmythsovertime: Myth1.Valuationmodelsarequantitative,soitisobjectiveandprecise. Myth2.Awell-researched,well-donemodelistimeless. Myth3.Themorequantitativeamodel,thebetterthevaluation. Myth4.Theoutput,nottheprocess,ofthevaluationiswhatcounts. Myth5.Themarketisgenerallywrong.MBA1Finance资料仅供参考,不当之处，请联系改正。Applications Wewillapplyvaluationprinciplesinvarietyofsettings: Privatesales GraphiteMining,OxfordLearningCentres Mergers&Acquisitions HuskyEnergy,UnitedGrainGrowers,EmpireCompany CapitalRaising Eaton’s,HuanengPower)MBA1Finance资料仅供参考,不当之处，请联系改正。ValuationReferencesCopeland,KollerandMurrin,1994,Valuation:MeasuringandManagingtheValueofCompanies(Wiley)Damodaran,1996,InvestmentValuation(Wiley);Pratt,ReillyandSchweihs,1996,ValuingaBusiness:TheAnalysisandAppraisalofCloselyHeldCompanies(Irwin)BenningaandSarig,1997,CorporateFinance:AValuationApproach(McGrawHill)Stewart,1991,TheQuestforValue(HarperCollins)HarvardBusinessSchoolNotes: AnIntroductiontoCashFlowValuationMethods(9-295-155) ANoteonValuationinPrivateSettings(9-297-050) NoteonAdjustedPresentValue(9-293-092)