Highly Technical, Market-Driven

Mergers and Acquisitions Courses

Due Diligence
Joint Ventures
Advanced Takeover Code
Tax Issues in M&A
Sale & Purchase Agreements
Introduction to the Takeover Code
Financial Issues in Acquisition Agreements
Advanced Private Equity & LBO Training
Advanced Private Equity & LBO Training Masterclass
Buying a Company
Advanced Negotiation issues in M&A
Advanced Negotiation issues in Financial Covenants
Selling a Company
The M&A Course
Negotiating Heads of Terms (LOIMOU) & Related
Issues
Modelling For Mergers & Acquisitions

web: redliffetraining.com email: [email protected] phone: +44 (0)20 7387 4484

 Due Diligence In Corporate Finance Transactions
Date: 10 Oct 2017, 05 Mar 2018, 08 Oct 2018
Location: London Standard Price: 675 + VAT
Membership Price: 540 + VAT

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Course Overview

There are many definitions for Due Diligence in the context of corporate finance transactions. Out of
all of them, the following one captures the essence of our course:

A future-oriented super audit to help minimize the risks and maximize the shareholder value creation
in an M&A transaction (Business Due Diligence Strategies - Jeffrey Weiner)

All the words of the definition are important. It definitely needs to be future-oriented, because nobody
would buy a business for what it did in the past. Super audit refers to the ample scope and depth
required in the exercise. And, finally, lets not forget the objectives of the exercise: minimize the
risks - which could ultimately mean you should not do the deal at all - and maximize shareholder
value - for instance through adapting the transaction structure, lowering price or seeking contractual
protection against findings of the Due Diligence process.

Note that the definition was focused on an M&A transaction, while in our course the scope will be
broader, including capital markets trades.

The course will provide an overview of the typical fields subject to Due Diligence - both in M&A and
capital markets situations. It will also look at the different phases of the processes, and will explain
how Due Diligence plays a role in each one of them. The course will describe the role that each party
plays in the Due Diligence process and of the consequences of lack of accurateness or negligence for
companies, managers, advisors and regulators.

Given that, for many reasons, the Due Diligence process is often not as complete as the buyer
would want, we will also look at the more comprehensive protection that can be obtained through
representations and warranties. The course will also look at the rest of the Share Purchase Agreement
and other contractual matters around M&A transactions.

The course will follow a practical, not theoretical approach. Real life cases will be discussed in order to
apprehend the main learning lessons they provide.

Learning Objective:
This course is designed to provide a general overview of how to approach a due diligence process for
advisory professionals and executives of corporations. It will highlight the main areas of focus, the key
documents and the most frequent issues to be addressed.

In addition, the course will pay special attention to how to translate the findings into price, transaction
conditions or contractual protection through reps and warranties. The course will also introduce case
studies that will be helpful to relate all the theory to practical examples in actual M&A and capital
markets transactions.

Learning Pre-requisites:
There is no previous knowledge required to be able to follow the course successfully. The provided
reading material will help to get up to speed with the main areas of discussion.

Course Content
The C.P. Alstra Bank will highlight how the
An Introduction to Due Diligence Due Diligence process will generate significant
What is Due Diligence? information and inputs that should be incor-
How important is Due Diligence? porated to the final terms of the transaction
There are processes with and without Due through price adjustments, earn outs and/or
Diligence contractual provisions.
Who Performs Due Diligence?
When do we perform Due Diligence? Key Due Diligence Areas
A continuous process Strategic
The sellers perspective Fit in strategy
The output Barriers of entry acquisition vs. organic
growth or greenfield
SWOT
M&A Case Study Astra Bank How has the industry changed over the last

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Course Content
Regulators
5 years? How will it changed in the next Regulatory constraints affecting the busi-
5? ness
Tech disruption threats Correspondence with regulators
Commercial Regulatory approvals for the transaction
Market: size and growth Ability to distribute dividends
Competitive landscape Anti-trust analysis
Products Other aspects of the Transaction
Geographical breakdown
Brand
Distribution M&A Case Study Glencores acquisition of
Market share analysis Xstrata
JVs and partnerships. Break up clauses Glencore made its offer to acquire the
Customers and Suppliers analysis shares of Xstrata that it did not own
Number of customers from a privileged situation. The level of
Sales for top 5-10-25 customers information available was uneven. The
Length of customer relationships process triggered an exceptional corporate
Buying dynamics and key factors affecting governance mechanism to protect minority
commercial success shareholders, and also significant investor
Number of suppliers scepticism.
Bargaining power of suppliers
Ability to pass price increases through to
the customers M&A Case Study Acquisition of TSB by
Synergy potential analysis and estimate of Banco Sabadell
restructuring charges The C.P. TSB will highlight how Banco Sa-
Financial badell detected relevant IT issues in its due
Macro trends diligence for TSB, and ended up negotiating
Quality of earnings with the controlling shareholder of TSB a
Current capital intensity and capital inten- transitional mechanism to upgrade and mi-
sity of future growth grate the IT system of TSB in a satisfactory
Capital structure manner. The Case is particularly interesting
Credit Ratings because despite having a controlling share-
Debt calendar holder (Lloyds Banking Group), TSB was list-
Working capital ed, and hence there was a third stakeholder
Pending capex in the discussion, which were the minorities
Fixed costs and operating leverage of TSB.
Legal
Corporate filings
Litigation The Due Diligence Process in the context of
Patents a M&A Transaction
Environmental Transactions with No Due Diligence
Activities in complex geographies Pre-transaction Due Diligence
Sanctions The Due Diligence in the different phases of a
Key contracts. Guaranteed contracts. M&A Transaction
Break-up penalties Information Memorandum prior to non bind-
Risk Management ing offers
IT Data Room & virtual Data Room
Sufficiency and suitability of platforms and Vendor Due Diligence Reports
software Site visits
Network infrastructure Management Due Diligence, Q&As and Break-
Cyber security Out sessions
Back-up and recovery Contractual Warranties
Scalability Irrevocables
Capex plan Role of external advisors
Compatibility, migration and costs associ- Incentives of the management team of the
ated asset being sold
Property, plant and equipment From signing to closing
Tax Confirmatory Due Diligence
Tax structure Diligencing the minutes of the board
Tax liabilities Incorporating conclusions of the Due Dili-
Foreign earnings and cash abroad gence to the Final Terms of the Transaction
Deferred tax assets Clawbacks and earn outs
HR Specific aspects of due diligence for private
Compensation: amount and structure equity firms
Top management contracts
Labour law and unions M&A Due Diligence Horror Stories
Intellectual property
Examples of transactions where due

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Course Content

diligence process fails Bring-down Due Diligence

AOL-Time Warner What did it fail? Inclusion of retail investors
Regular information requirements
Regulatory swings
M&A Case Study Acquisition of HBOS by
Lloyds TSB Capital Markets Due Diligence Horror Stories
The price offered for HBOS was based on a
number of assumptions that proved inaccu- Examples of transactions where due diligence
rate. The case study will introduce several process fails
due diligence aspects that are worth discuss- IPO Bankia What did it fail?
ing.

Contract Negotiations, SPA, Reps & Capital Markets Case Study IPO of Betanzos
Warranties Bank
Due Diligence exercise vs. Acquisition Agree- The C.P. IPO of Betanzos Bank will develop the
ment different phases of Due Diligence during a cap-
SPA ital markets transaction, the responsibility of
Examples of reps & warranties the company and its advisors, the reputational
Who is giving the reps & warranties risks and the role of regulators.
Misrepresentations
Claims
Extent of liabilities Latest Trends in Transaction Due Diligence
Limitation period Vendor Due Diligence
Franchise Paying for buyers Due Diligence
Remedies Second phase consortiums and pooling Due
Escrow Diligence inputs
Due Diligence and Management Retention Marking up SPA ahead of binding offers
schemes Escrows
Break-up fees Hostile activity
Regulatory approvals Key areas of Soft Due Diligence
MAC Strategy
Introducing warranties in a public tender Culture
offer structure? Quality of information
Contingent Value Rights (CVR) Technical differences and interpretation
Integration and synergies
Capital Markets Case Study IPO of Big/recent fiascos in M&A Due Diligence
NetMedia plc Increased number of withdrawn transactions
The C.P. IPO of NetMedia plc will describe the Due diligence of disruptive and tech related
complexity of financial DD in capital markets business models
transactions, the price discovery mechanism,
the process of setting the price range / de- Wrap-up and Key Conclusions
ciding final pricing, and the risk of a drop in
share price once the company is listed.

The Due Diligence Process in the context of

a Capital Markets Transaction
Objectives. The Underwriter as the link be-
tween investors and issuers
Transaction Due Diligence
Prospectus / IOC
Forward looking statements
Access to US investors
Reg S / 144A / Fully registered offers. QIBs
and Big Boys letters
Legal Due Diligence
Corporate Governance
Publicity guidelines
10b-5
Analyst presentations and research
MD&A
Force Majeure
Role of auditors. Proformas. Comfort letter.
Tick and tie.
OFAC
Sanctions

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 Joint Ventures
Date: 12 Sep, 5 Feb 2018, 10 Sep 2018
Location: London Standard Price: 695 + VAT
Membership Price: 556 + VAT

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Course Overview

Joint ventures are an important option for businesses in their home country or internationally. Along with acquisi-
tions it is a model for corporate growth.
The course looks at the reasons for joint ventures including the commercial reasons and how they are reflected in
the legal structure and documents.
Looking at negotiations it focuses on the general aspect of negotiations as well as critical areas for joint venture
negotiations.
The course recognises the commercial and legal problems that regularly arise during the life cycle of a joint ven-
ture. It covers the often thorny issue of pre contract documents including the differences in common and civil law.
It goes on to look at the different options of legal structures that can be selected depending on the commercial
objectives and addresses the advantages and disadvantages of each option including limited companies, partner-
ships and contractual joint ventures.
It then looks at challenges of decision making in a joint venture where parties are working to a common end but
have different ultimate interests. This leads to differences, ways to resolve them are looked at and what happens if
the joint venture partner are unable to reach a decision. , including deadlock and options such as Russian Rou-
lette and Texas Shoot Out. How and to whom parties may transfer shares, minority shareholders.
Coming to the end of the life cycle the programme focuses on exit, termination and change of control.
During the course participants will look at case studies, look at sample documents and receive checklists to assist
them with dealing with joint ventures a following the course.

Course Content
Subject to contract
Introduction Governing law choice and impact
What is a Joint Venture? Advice to negotiators Checklist
Why enter into a Joint Venture?
Reasons for Joint Ventures
Choosing a legal structure Selecting the Legal Structure that Reflects
Key legal considerations Commercial Objectives Key Determinants
Information you need to decide on the legal Relevant laws
structure International joint ventures
Key success factors Questions to address
Restrictions
Negotiating General Guidelines
Objectives in negotiations
Main Joint Venture Structures Advantages
Strategy
& Disadvantages
BATNA
Limited Liability Company
Zone of Possible Agreement
Limited Liability Partnership
Price versus value
Partnership
Creating and sustaining value
Contractual Joint Venture
10 areas where joint venture negotiations
Contentious areas
can establish successful sustainable joint
ventures
Decision Making
Directors
Pre Contract Documents Heads of
Votes
Terms/MoU with Sample Document
Quorum
Pros and cons
Reserved Matters
Types of pre-contract documents
Conflicts of Interest
Duty of good faith
Letters of intent
Memorandum of Understanding Deadlock & Default

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Course Content

Default
Casting Vote Case studies
Winding up
Put and Call Options Sample documents and checklists
Sale
Texas Shoot Out
Dutch Auction
Russian Roulette

Transfer of Shares
Pre emption rights
Right of first offer
Right of first refusal
Pre emption problem areas
Permitted transfers
Change of control
Drag and Tag Rights

Exit, Termination and Change

Importance and Key Issues
Fixed term/joint renewal
Termination for convenience
Termination for Cause
Consequences of Exit/Termination
Winding up

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 Advanced Takeover Code
Date: 13 Jul, 9 Nov, 27 Apr 2018, 08 Nov 2018
Location: London Standard Price: 695 + VAT
Mebership Price: 556 + VAT

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Course Overview
This course covers key rules in the Takeover Code regulating takeovers and the bid strategies and
tactics that are used in the current marketplace.

Following the extensive Code Review in 2011, the tactical advantage that possible bidders have had
in takeovers has changed and the course examines the numerous effects this has had on bidder and
target strategies.

Participants will learn how takeovers are conducted from the initial stages to the completion or lapsing
of the bid and will gain an understanding of which strategies and tactics have and which have not
worked, with examples from many recent deals.

Course Content

Bidder Strategies and Tactics

The Takeover Code: Conduct of Offer Buying share stakes in Target
The UK takeover framework Advantages of buying share stakes before
Legal, UKLA and Code provisions and during bid
Risks of buying stakes
Key rules for the conduct of public bids Restrictions on stake-buying and regulatory
Announcements requirements
When possible/firm offer announcements Methods of acquiring stakes
are required Is it worth holding a large minority stake?
Advisers responsibilities for announce- Irrevocable undertakings
ments Advantages of holding irrevocables
What is an untoward share price move- Attitude of shareholders
ment? Hard and soft irrevocables
Disclosures following announcements Non-binding letters of intent
Naming and Put Up or Shut Up Impact of Code changes
Contents of firm offer Return to traditional bid approach
Conditions/pre-conditions Effect of 28 day PUSU and naming
When can they be subjective? Work which needs to be done before ap-
When can they be invoked? proach
What pre-conditions are possible in firm Friendly negotiations or hostile offer?
offer announcements? Possible offers and bear hugs
Minimum consideration following market Timing considerations of firm offer announce-
purchases ments and bid Issues if US shareholders are
Restrictions present
No special deals Structure: Scheme of Arrangements or Offer
Management incentivisation in PTPs Advantages and disadvantages compared to
Frustrating actions and exceptions contractual offer
Squeeze out requirements Examples of Schemes/offers meeting share-
Overview of recent changes to rules holder opposition
Types of takeover Examples of Schemes in competitive situa-
Offer statistics tions
Contractual offer timetable Cash or share offer?
How hostile offers are played out Advantages/disadvantages of cash and
Timetables in competitive situations shares
Development of Schemes of Arrange- Different mixes of consideration
ment Cash alternative structures
The rules for Schemes and timetable Other financing structures
Mandatory offer and whitewash require- Means of using foreign shares
ments and uses Care with statements
Partial and tender offers rules and Price and other future actions
when they are useful Concluding the offer
When to increase offer
Public Takeovers: Strategies and Tactics Are no increase / no extension statements
Changes in marketplace which have affect- useful?
ed takeovers

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Course Content

Target Strategies and Tactics Restructuring and valuations

Basic arguments for defence Share buy-backs and special dividends
Directors and advisers responsibilities What works best?
in accepting/rejecting an offer Pleadings
Measures before a bid Anti-trust
Keeping close to market White knight/squire
Identification of stakes Bolster the board
Position of pension fund Get them before they get you
Negotiate, open books or make possible
offer announcement? Both Sides Strategies and Tactics
Effects of a possible offer announcement Conflicts of interest
and timing Examining documents/statements
Advantages of an auction Financial and managerial arguments
When should Target refuse to talk? Direct approach to shareholders/analysts
When to open up books?
Forecasts and undertakings
Profit/dividend forecasts

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 Tax Issues in M&A
Date: 6 Oct 2017, 23 Jan 2018, 23 May 2018, 02 Oct 2018
Location: London Standard Price: 695 + VAT
Membership Price: 556 + VAT

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Course Overview

This seminar considers the taxation implications of buying and selling businesses.

The viewpoints of the purchasers and vendors are both considered in depth, with the relevant taxes
being covered with worked examples and a case study.

The seminar also covers the tax treatment of managers shares and tax issues relating to venture
capital.

Course Content

Advising the Purchasers Tax Issues affecting employee shares

Purchase of shares or assets? Taxation of employee shares including re-
Tax relief for goodwill and intangibles stricted securities
Capital allowances considerations, particu- Impact on earn outs and MBOs
larly fixtures in buildings The use of share options to attract and
Taking advantage of trading losses in target retain key staff
Capital gains de-grouping charge Availability of CGT entrepreneurs relief
Financing the transaction tax relief for for the management team
interest costs
Stamp Duty and Stamp Duty Land Tax con- Tax Issues relating to Venture Capital
siderations An overview of the Enterprise Investment
Scheme (EIS) and Seed EIS
Advising Individual Vendors Qualifying companies and excluded activ-
Pre-sale planning ities
Sale of shares or sale of assets? Conditions for the individual investor
Maximising CGT entrepreneurs relief Significance of being connected with
The importance of trading company sta- the company
tus The Business Angel rule
Tax treatment of consideration cash, Venture Capital Trusts
shares, loan notes and earn-outs
QCBs or Non-QCB loan notes?

Advising Corporate Vendors

Pre-sale planning
Form of consideration cash, shares, loan
notes and earn-outs
Securing the substantial shareholdings
exemption
Definition of trading company for sub-
stantial shareholdings exemption

Inland Revenue Clearances, in particular

Section 138 TCGA 1992 re capital gains
Section 701 ITA 2007 re tax advantages

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 Sale & Purchase Agreements - The Commercial Issues
Date: 7 Jul, 1 Nov, 05 Feb 2018, 09 Jul 2018, 26 Nov 2018
Location: London Standard Price: 695+VAT
Membership Price: 556 + VAT

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Course Overview

A simplistic view of an acquisition is that the actual price paid is paramount but experienced practitioners
recognise that price is but one aspect of the deal and that there is the potential for significant value
leakage in arriving at the actual price and also from claims arising after completion.

The price paid may seem a simple concept but, in practice, requires an understanding of how this
is derived. Most private acquisitions are based on a cash-free, debt-free basis with adjustments for
working capital or net assets. Buyers typically develop an enterprise value which is then adjusted to
derive an equity value by adjusting for cash, debt and working capital all of which needs to be captured
in the Sale & Purchase Agreement (SPA). When the consideration is to be paid in a foreign currency,
a range of issues can intervene to create problems for both parties.

English law is widely used for many contracts and the recent decision in Arnold v Britton has clarified
decisions in earlier judgements and clarified the how the courts and parties will approach this in the
future. The course reviews these and the differing approach to this in the USA.

Negotiating and documenting these items is not as straightforward as one might expect; for example,
does cash include trapped cash, what does debt include, what is wrong with using average
working capital and how can parties minimise subsequent disputes? Additionally, the choice of the
completion mechanism (completion accounts or locked box) creates further opportunity for further
value transfer. Even after completion the seller may find further value erosion through claims arising
under the warranties and indemnities.

There is no right or wrong answer to many of these questions and the ultimate position will be dictated
by the negotiating strength of the respective buyer and seller. Despite that, a sound grasp of the key
commercial and legal issues can minimise value loss for parties.

This programme focuses on transactions involving the purchase of shares but also covers areas of
specific relevance to asset purchases. It provides a step by step template to the basics but also covers
the critical legal and commercial aspects in the transaction from the perspective of both buyer and
seller. Reference is made to recent or relevant leading cases.

Please note that this course covers material that is also covered on the Advanced Negotiation Issues
in M&A course.

Course Content

SPA structure & Interpretation issues Problems in English law

The skeleton structure of a contract: over- Dispute Resolution
view Jurisdiction & choice of law
General approach to interpretation of con-
tracts Ancillary agreements
UK vs USA vs Europe Confidentiality letters
Influence of Arnold v Britton case Exclusivity agreements
Interpretation Forex issues re price / cur- Heads of agreement / letter of Intent
rency (avoiding the traps) Checklist of key issues
Implied terms & duty to negotiate in good Drafting guidelines
faith Migrating the terms to the SPA
Position in the UK Pros & cons
Position in the USA Side letters
Position in Europe / civil law - Traps for Whats in a name
the unwary
The spectrum of endeavours/ efforts Best The purchase price: reconciling enterprise
vs Reasonable other variants to equity value
Force majeure Common purchase price protections
Doctrine of Frustration Cash free/ debt free (What should be in-

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 Sale & Purchase Agreements - The Commercial Issues
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Course Content

cluded in Debt) Retrospective price adjustment

Cash vs trapped cash? The common areas of warranty protection
Equity / NAV adjustments The information warranty (on the target)
Capex issues Quality of information information is
Debt what is included? true, accurate, complete and not mis-
Adjustments for working capital leading
Receivables Accuracy of information in the disclosure
Inventory letter /
WIP problem areas bundle
Normalised working capital The full disclosure / sweeper warranty
Who provides the warranties
Issues with multiple sellers, limits on lia-
Other adjustments to the price bility
warranties & indemnity claims Sales of subsidiaries
Completion mechanisms & non- Sales by trustees
simultaneous exchange & completion What about the directors?
How this can affect the deal, source of value Private equity issues - managers (not
loss owners)
Locked box vs completion accounts
Key differences Disclosure
Completion accounts Why & how it matters
Pros & cons General vs specific disclosure
The disclosure letter & disclosure bundle
Problem areas access post completion When should disclosure be made?
Locked box Sellers vs buyers approach to disclosure
Pros & cons What is disclosed the data room?
Leakage vs permitted leakage How full & complete must disclosure be
Other areas of potential dispute What is fair disclosure?
Issues with the accounts
Impact & role in the deal why they matter Indemnities
Which accounts? Consolidated vs individual, Purpose of & rationale for Indemnities
statutory, audited, management Key issues
Issues to consider when exchange & comple- Sandbagging (buyers ability to seek re-
tion not simultaneous dress despite prior knowledge)
Conditions to completion Indemnification as the exclusive remedy
(carve-outs)
Matters between exchange & completion Main areas of Indemnity coverage
Other matters warranties, costs, breach Environmental
by seller Product liability
Litigation (esp IPR)
Representations & misrepresentations
Representations vs warranties vs indemni- Limitations on liability under the
ties warranties & indemnities
Representations vs term (of contract) Awareness carve-outs
Critical negotiating issues (buyer vs seller Time limits
friendly) Financial limits
Financial statements fair presentation De minimis limits
representation Threshold for aggregate claims
No undisclosed liabilities representation Overall cap
Full disclosure representation Other limits
Manner of misrepresentations Security for breach of warranty
Statements of opinion vs statements of Retentions & escrow accounts
law Set-off
Types of misrepresentations & their reme- Bank guarantees
dies Warranty & Indemnity insurance a viable
Fraudulent vs negligent vs innocent mis- solution?
representations Buyer vs seller policies key differences
Accuracy of representations
When must representation to be accurate Tax; whats best covenant, warranty,
agreement vs closing date indemnity?
Accuracy of representations - in all vs Why is a tax covenant needed - rationale
material Benefits vis--vis the tax warranties
respects vs MAE qualification Scope of the covenant
Why & when is a tax warranty also re-
Warranties quired?
Warranties rationale Impact of the Zim Properties case
Warranties and interaction with disclosure
Purpose of warranties

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 Introduction to the Takeover Code
Date: 18 Oct, 01 Mar 2018, 12 Oct 2018
Location: London Standard Price: 600 + VAT
Membership Price: 480 + VAT

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Course Overview

On this introduction to the Takeover Code course, participants will learn about how the Takeover Panel
operates in practice and how to apply the six general principles.

The course will cover the issues involved in approaching target companies, making announcements,
giving independent advice and complying with share dealing restrictions. Participants will also gain a
strong understanding of voluntary, mandatory and partial offers as well as the principles of the bid
timetable and the conduct of the parties during an offer period.

The course will examine the circumstances when the Takeover Code is applicable, the relevance of
the key rules of the Takeover Code, the application of the Code in practice and the documentation
requirements of the Panel.

Course Content
Introduction to the Takeover Code Pre-conditions and conditions in firm offers
How the Takeover Panel operates (Rule 13)
Companies, transactions and persons subject Partial offer requirements (Rule 36)
to the Code
Enforcement of the Code
Provisions applicable to all offers
The Six General Principles and their Multiple classes of share capital (Rule 14)
application Convertibles and warrants (Rule 15)
Special deals with favourable conditions (Rule
Key Code definitions 16)
Announcement of acceptance levels (Rule 17)
The approach, announcements and Restrictions following offers and partial offers
independent advice (Rules 1-3) (Rule 35)
Secrecy
When announcements are required
Announcements of possible offers and nam- Conduct during the offer
ing Standards of care for Information (Rule 19)
Terms and pre-conditions in possible offers Responsibility for information
Automatic 28 day PUSU Unacceptable statements
Firm offer announcements (Rule 2.7) Post-offer undertakings and statements of in-
Consequences of statement of intention not tention
to make offer Equality of information (Rule 20)
Irrevocable commitments Restrictions on frustrating action (Rule 21)
Independent advice
Profit forecasts, QFBS and asset valuations
Dealing restrictions, discloures and share (Rules 28 and 29)
purchases Different types of profit forecast
Prohibited dealings ( Rule 4) Reporting requirements
Consideration to be offered (Rules 6 and 11) Disclosures for Quantified Financial Benefit
Consequences of certain dealings (Rule 7) Statements
Disclosure requirements in offer period Consensus forecasts
(Rules 8 and 38) Asset valuation reporting requirements
Timing restrictions on acquisition of shares
and exceptions (Rule 5)
Outline timetables (Rules 31 to 34 and
Mandatory offers (Rule 9) Appendix 7)
When required Contractual offers
Conditions which are possible Schemes of arrangements
Price payable
Whitewash procedure
Purchase of own shares (Rule 37)
Voluntary offers
The acceptance condition (Rule 10)
The CMA and the European Commission
(Rule 12)

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 Financial Issues In Acquisition Agreements
Date: 10 Jul, 30 Oct, 20 Feb 2018, 05 Jul 2018, 29 Oct 2018
Location: London Standard Price: 550 +VAT
Membership Price: 440 + VAT

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Course Overview

This course is designed to help participants understand and deal effectively with the financial issues
arising from sale and purchase agreements. It will help them prepare for discussions and negotia-
tions around working capital and completion accounts. Cash free debt free transactions, earn out
agreements and the option to apply locked box provisions.

The course will also consider some of the key current issues such as the impact of the transition
to new UKGAAP from 2014, the new IFRS on revenue recognition and the full impact of fair value
accounting on sale and purchase negotiations. The course will help participants to add value to the
transaction.

The course is designed to be highly practical and will include case studies that will reflect the actual
sale and purchase process including the most common contentious areas.

Course Content
Working capital
What is meant by working capital
The initial steps What should be included and when is it signifi-
Setting the target Net Asset Value and un- cant what types of business and industry
derstanding the main influences on price Calculating working capital needs
The importance of the statutory accounts and Cash movement restrictions
transactions in the critical window to comple- Timing the transaction to maximise the advan-
tion tage the window dressing opportunities
Completion accounts why they are neces- Case study calculating working
sary and what they can and should achieve capital requirements and identifying the
What pricing options work best? Based on fundamental uncertainties how could these
completion values or using a locked box be used for or against you?
structure
Policies, estimates and uncertainties under- Locked box agreements
standing the positives and the negatives What is a locked box provision and how does it
Case study assessment of typical work?
accounting and financial policies and Why such agreements exist compared to the
consideration of what could be used to traditional structures used
your advantage and disadvantage. The case What are the likely problem areas and what
study will consider contentious issues such protections should be put in place?
as contingencies and provisions, financial Case study comparing a transaction
instruments and impairments. applying a locked box provision to a
traditional arrangement with a balance due
based on values in completion accounts.
Debt free cash free
What is meant by debt free cash free and
why it is important Earn outs
Reconciling the net proceeds amount Why used and when are these best used?
What is meant by cash, cash equivalents and Typical performance indicators and measures
debt?
Cash v non-cash transactions how and why Case study consideration of a typical earn
to tell the apart out agreement identifying the issues which
Some contentious matters invoice financ- could arise and how they should be dealt
ing and the increasing use of fair values (net with. This example will look at revenue
present values) targets, profits and earnings measures and
impact on overall value (or share price).
Case study examination of a typical Structured business arrangements
balance sheet and consideration of what Understanding key trading arrangements and
should be included as debt and what should structures involving the entity for sale
not. This exercise will introduce issues Group companies and other related parties
such as invoice financing arrangements, associates and joint arrangements
non-controlling interests, preferred stock Inter-company transactions, asset transfers
and compound financial arrangements and other barter arrangements
(convertibles) Service concessions, operating leases and
possible off balance sheet arrangements

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 Advanced Private Equity & Leveraged Buy-outs
Date: 16-18 Oct, 19-21 Feb 2018, 25-27 Jun 2018, 01-03 Oct 2018
Location: London Standard Price: 1,800 + VAT
Membership Price: 1,440 + VAT

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Course Overview

The programme will review the impact of the draft ECB guidance on leveraged transactions.

This program is designed to provide participants with a comprehensive view of private equity from
the perspective of all the main participants. These include the providers of loan and bond finance,
the private equity firms, the various professional advisers and the management team. The focus is
largely on development capital (i.e. for firms with debt capacity) but also touches on matters relevant
to venture capital.

The course covers the three key stages of the deal transaction from entry to exit. It provides an insight
into the main value drivers in the process and the main areas of risk, the major structural issues that
need to be considered and the structure and parameters used to gauge the optimum amount of debt/
equity in the capital structure.

Participants will acquire a thorough understanding of the various types of debt that are available,
including both senior and junior loans and the various types of bonds which are being used increasingly
by private equity firms and corporates, as well as the key issues for the providers of both loans and
bonds.

The programme covers critical issues from the perspective of the PE firm and an understanding of
how their funds are structured as this means they approach transactions from a different perspective
to corporates. Finally, the varied roles of management, key issues that arise for them and their
interaction with the PE investors are also covered as these aspects are vital to ensure management
remain properly incentivised to create value.

The programme will benefit those involved in private equity whether directly (e.g. investor, manager
or lender) or indirectly, typically as a professional advisor. It adopts a pan-European approach to the
topic but the presenter is able to discuss issues relevant in the USA and Asia in view of his exposure
to those markets if participants require. Reference will be made to current trends and data in the
markets across Europe.

Participants will be provided with numerous case studies to reinforce the various aspects and will also
be provided with an LBO model which will be used to structure a transaction.

Course Content

DAY 1 Security contrasted: UK vs Europe vs

USA
Introduction & background Financial assistance
Overview of the PE market Ranking & priority of senior vs junior
Venture capital debt & pari passu loan/bond structures
PE / leveraged deals Tax issues - group tax relief & thin cap
The three stages of the deal Squeeze-outs
Entry, operations & exit Spectrum of financing instruments in
The traditional PE value creation model LBOs - overview
the 3 key value drivers Structuring parameters - creating an ap-
Techniques for enhancing returns propriate financial structure (overview)
Capital structures impact on value Percentage senior, junior and equity in
Using soft exits recaps / refinancings debt capital structure
Equity bridges, Leveraging the fund EBITDA multiples
Target returns for PE & mezzanine
Structuring issues & structuring funds
parameters
Structuring issues Case Study: Calculating the entry and
Taking security / collateral generally exit value, the funding sources, the
basic approach to deriving the equity

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Course Content

split between PE and management capex

on entry and exit and introduction
to estimating the correct capital Financing instruments high yield
structure notes: key commercial terms & current
trends
The acquisition - offer structure High yield notes
Offer structure cash free, debt free Market trends
with normalised working capital/net Pros & cons of high yield and why it has
asset value etc been so successful
Risk matrix - analysis of the five key Summary of the typical terms applicable
value drivers / areas for due diligence to notes
Cash & trapped cash Covenant structure
Debt whats included? Call protection
Working capital (key to the deal?) Review of the bond covenant package
Capex, EBITDA (the good news & Loans vs bonds compared
bad) Loans maintenance covenants vs
Establishing the run rate Bonds Incurrence covenants
Value matrix techniques for mitigating Other differences
the risks and identifying value Senior secured (first lien) notes
SPA structuring - locked box vs comple- Second lien notes
tion accounts Senior (unsecured) notes
Pros & cons of each PIK notes, pay if you want (PIYW or
Toggles), pay if you can (PIYC)
Case Study: Identifying problematic Fixed vs FRNs
items in reconciling equity value
to enterprise value and the correct The lenders perspective
approach to calculating the correct Lenders approach to credit decision
level of working capital (Loans)
measuring debt capacity
security over assets
exit routes
DAY 2 Overview of loan documentation and im-
pact on deal/restructuring
Financing Instruments loans: key Loan as a radar system
commercial terms & current trends Typical structure
Senior loans; key facilities & issues Key parties (obligors, borrowers and
Typical terms guarantors)
RCFs avoiding typical pitfalls Key financial ratios / covenants
Capex facilities Limitations / interaction of the annual
Cash sweeps - typical, terms struc- debt service coverage ratio (ADSCR),
ture & issues total debt/EBITDA, interest cover
Margin ratchets Selecting the appropriate ratio for the
Mezzanine and junior mezzanine deal
Rationale of warranted vs. war- The four deal scenarios and the role of
rant-less due diligence
Key issues for the warrant-holder Inter-creditor issues
Key issues in warrant-less deals The key issues for senior vs junior debt
Other forms of junior loans (note: both Key issues for pari loan / bond struc-
2nd lien and PIK loans have been nas- tures
cent in Europe since 2007)
Second lien loans Case Study: Review a detailed term
PIK loans sheet for a senior loan, identify the
Asset based lending key commercial aspects and how and
Application & use where it should be amended to make it
Typical terms & conditions borrower / lender friendly

Case Study: Reviewing a capital

structure and how different
instruments can be used to optimise
the capital structure,
provide more head room and handle

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Course Content

DAY 3 Problem areas trade vs secondary PE

deals
Sponsors perspective Soft exits a useful way of enhancing re-
Structuring the equity turns
Structure - loans, preference shares Recaps, refis
Typical returns Management and other fees
Equity ratchets
Rationale, structure Case Study: Discuss the pros and cons of a
Pros and cons of positive vs. negative, dual/triple track exit strategy and the key
stepped vs. linear issues to both the PE and management
Structure and key terms for PE funds
(and impact of the deal) Management issues
Investment period (how long) Multifaceted role and duties of management
Preferred return (rate, calculation) Issues vis--vis role as director, employ-
Carry (European vs US approach) ee, shareholder, warrantor
The 5 critical issues to sponsors Key documents & terms
Portfolio fit Shareholders agreement vs articles/
The business model statues (pros & cons)
Management - what PEs approach Critical issues in the investment agreement
Approach to generating value/returns Good vs. bad leaver
Exits hard vs. soft Management warranties
Equity valuation issues pre exit (why
Case Study: Calculate the exit value fair value is dangerous)
and discuss how structuring the PE Transfer issues drag, tag-along rights
equity can affect the returns of Critical issues in the service agreement
management Restraints
Termination
Exits - hard & soft
Hard exits vs soft exits
Review of market trends Case Study: Review and discuss the key
Exit strategy duel, triple track - Pros & terms in the management agreement
cons and how they should be structured in a
IPOs management friendly manner
The key ingredients for IPO
Partial vs complete exit
What about the management problem
areas
Sale of equity partial vs complete sale

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Advanced Private Equity & Leverage Buy-Outs: A 5-Day Master-Class
Date: 26-30 Jun, 16-20 Oct, 19-23 Feb 2018, 25-29 Jun 2018, 01-05 Oct 2018
Location: London Standard Price: 3,000 + VAT
Membership Price:2,400 + VAT

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Course Overview
The programme will review the impact of the draft ECB guidance on leveraged transactions.

This program is designed to provide participants with a comprehensive view of private equity from
the perspective of all the main participants. These include the providers of loan and bond finance,
the private equity firms, the various professional advisers and the management team. The focus is
largely on development capital (i.e. for firms with debt capacity) but also touches on matters relevant
to venture capital.

The first, second and third day of the course covers the three key stages of the deal transaction from
entry to exit. It provides an insight into the main value drivers in the process and the main areas of
risk, the major structural issues that need to be considered and the structure and parameters used to
gauge the optimum amount of debt/equity in the capital structure.

Participants will acquire a thorough understanding of the various types of debt that are available,
including both senior and junior loans and the various types of bonds which are being used increasingly
by private equity firms and corporates, as well as the key issues for the providers of both loans and
bonds.

The programme covers critical issues from the perspective of the PE firm and an understanding of
how their funds are structured as this means they approach transactions from a different perspective
to corporates. Finally, the varied roles of management, key issues that arise for them and their
interaction with the PE investors are also covered as these aspects are vital to ensure management
remain properly incentivised to create value.

The programme will benefit those involved in private equity whether directly (e.g. investor, manager
or lender) or indirectly, typically as a professional advisor. It adopts a pan-European approach to the
topic but the presenter is able to discuss issues relevant in the USA and Asia in view of his exposure
to those markets if participants require. Reference will be made to current trends and data in the
markets across Europe.

Participants will be provided with numerous case studies to reinforce the various aspects and will also
be provided with an LBO model which will be used to structure a transaction.

The fourth and fifth day of the course will cover the key elements of modelling in an LBO analysis.
Participants will value the target business using historic data and available equity research. The
valuation process will incorporate absolute and relative valuation techniques. Once the target business
has been valued, participants will be introduced to LBO analysis and construct an LBO model.

The LBO modelling analysis will be developed by assessing the debt capacity of the business to
determine the range of capital structures available for the transaction and how credit analysis is used
in the LBO modelling process.

The participants will then cover more complex LBO instruments such as warrants and PIKs and how
to calculate returns to each of the equity and debt providers.

Participants will model a more complex capital structure and calculate exit values and the IRRs
generated by each investor. Using the integrated model participants will then analyse various scenarios
(management case, base case, payout case) to derive the optimum financing structure taking into
account the financial constraints of each investor.

The participants will undertake an adjusted present value (APV) analysis to determine where value
has been created in the LBO transaction, using an APV model and finally look at recovery analysis for
a failed LBO transaction.

Case Study: The participants will use a variety of case studies and exercises during the
two days, based on publicly quoted and generic businesses.

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Course Content
Pros & cons of each
DAY 1 Case Study: Identifying problematic items in
reconciling equity value to enterprise value
Introduction & background and the correct approach to calculating the
Overview of the PE market correct level of working capital
Venture capital
PE / leveraged deals DAY 2
The three stages of the deal
Entry, operations & exit Financing Instruments loans: key commer-
The traditional PE value creation model cial terms & current trends
the 3 key value drivers Senior loans; key facilities & issues
Techniques for enhancing returns Typical terms
Capital structures impact on value RCFs avoiding typical pitfalls
Using soft exits recaps / refinancings Capex facilities
Equity bridges Cash sweeps - typical, terms structure &
Leveraging the fund issues
Margin ratchets
Structuring issues & structuring Mezzanine and junior mezzanine
parameters Rationale of warranted vs. warrant-less
Structuring issues Key issues for the warrant-holder
Taking security / collateral generally Key issues in warrant-less deals
Security contrasted: UK vs Europe vs Other forms of junior loans (note: both 2nd
USA lien and PIK loans have been nascent in Eu-
Financial assistance rope since 2007)
Ranking & priority of senior vs junior Second lien loans
debt & pari passu loan/bond structures PIK loans
Tax issues - group tax relief & thin cap Asset based lending
Squeeze-outs Application & use
Spectrum of financing instruments in Typical terms & conditions
LBOs - overview
Structuring parameters - creating an ap- Case Study: Reviewing a capital structure
propriate financial structure (overview) and how different instruments can be used to
Percentage senior, junior and equity in optimise the capital structure, provide more
debt capital structure head room and handle capex
EBITDA multiples
Target returns for PE & mezzanine funds Financing instruments high yield notes: key
commercial terms & current trends
Case Study: Calculating the entry and
exit value, the funding sources, the basic High yield notes
approach to deriving the equity split Market trends
between PE and management on entry Pros & cons of high yield and why it has been
and exit and introduction to estimating so successful
the correct capital structure Summary of the typical terms applicable to
notes
The acquisition - offer structure Covenant structure
Call protection
Offer structure cash free, debt free with Review of the bond covenant package
normalised working capital/net asset value Loans vs bonds compared
etc Loans maintenance covenants vs Bonds
Risk matrix - analysis of the five key value Incurrence covenants
drivers / areas for due diligence Other differences
Cash & trapped cash Senior secured (first lien) notes
Debt whats included? Second lien notes
Working capital (key to the deal?) Senior (unsecured) notes
Capex PIK notes, pay if you want (PIYW or Tog-
EBITDA (the good news & bad) gles), pay if you can (PIYC)
Establishing the run rate Fixed vs FRNs
Value matrix techniques for mitigating
the risks and identifying value Case Study: Identifying problematic items in
SPA structuring - locked box vs completion reconciling equity value to enterprise value
accounts and the correct approach to calculating the

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Course Content

correct level of working capital Exit strategy duel, triple track - Pros & cons
IPOs
The lenders perspective The key ingredients for IPO
Lenders approach to credit decision (Loans) Partial vs complete exit
measuring debt capacity What about the management problem
security over assets areas
exit routes Sale of equity partial vs complete sale
Overview of loan documentation and impact Problem areas trade vs secondary PE
on deal/restructuring deals
Loan as a radar system Soft exits a useful way of enhancing returns
Typical structure Recaps, refis
Key parties (obligors, borrowers and guar- Management and other fees
antors)
Key financial ratios / covenants Case Study: Discuss the pros and cons of a
Limitations / interaction of the annual debt dual/triple track exit strategy and the key
service coverage ratio (ADSCR), total issues to both the PE and
debt/EBITDA, interest cover management
Selecting the appropriate ratio for the deal
The four deal scenarios and the role of due Management issues
diligence Multifaceted role and duties of management
Inter-creditor issues Issues vis--vis role as director, employee,
The key issues for senior vs junior debt shareholder, warrantor
Key issues for pari loan / bond structures Key documents & terms
Shareholders agreement vs articles/ stat-
Case Study: Review a detailed term ues (pros & cons)
sheet for a senior loan, identify the key Critical issues in the investment agreement
commercial aspects and how and where it Good vs. bad leaver
should be amended to make it borrower / Management warranties
lender friendly Equity valuation issues pre exit (why fair
value is dangerous)
DAY 3 Transfer issues drag, tag-along rights
Critical issues in the service agreement
Sponsors perspective Restraints
Structuring the equity Termination
Structure - loans, preference shares Case Study: Review and discuss the key
Typical returns terms in the management agreement
Equity ratchets and how they should be structured in a
Rationale, structure management friendly manner
Pros and cons of positive vs. negative,
stepped vs. linear DAY 4 & 5
Structure and key terms for PE funds (and
impact of the deal) Leverage Overview
Investment period (how long) Background to the LBO market
Preferred return (rate, calculation) Why do LBOs happen?
Carry (European vs US approach) The agency effect
The 5 critical issues to sponsors Main parties to a deal and their roles
Portfolio fit Basic theory - The effect of leverage on firm
The business model value
Management - what PEs approach Levered vs unlevered businesses
Approach to generating value/returns The value of the tax shield
Exits hard vs. soft Bringing in bankruptcy costs

Case Study: Calculate the exit value and The LBO process
discuss how structuring the PE equity can Stand-alone value of the target what price to
affect the returns of management pay?
Modeling an LBO deal does the deal meet our
returns?
Exits - hard & soft Further analysis assessing the debt capacity
Hard exits vs soft exits Determining the capital structure
Review of market trends Assessing the value creation

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Course Content

Valuing the target characteristics

Sourcing information Historic and forecast Background to the capital markets and key
date providers of finance
Analysing equity research Current market conditions and ability to finance
Key attributes of broker analysis The high yield market
Pluses and minuses of equity research Mezzanine finance
Building a DCF valuation using equity re- Deal multiples and exit conditions
search Institutional and management equity
Which elements of research to use Traditional/new lenders
Cross checking the research Senior tranche profiles
Identifying errors in assumptions A, B, C, RCF
Modelling the stand alone valuation Subordinated tranche profiles
Which WACC to use Second lien
Underlying assumptions in a DCF Mezzanine (with/without warrants)
Different approaches to terminal value PIK
The value driver approach producing a High yield bonds
more realistic terminal value More complex issues warrants and options
Comparing and contrasting DCF and LBO
model structure Case Study IV: Modelling a more complex
capital structure with various scenarios
Case Study I: Participants model the stand calculating exit value and IRR for each of the
alone valuation of the target using historic capital providers
data and equity research
Assessing value creation in LBO transactions
APV analysis
LBO Modelling Overview
Key elements of an LBO model Key components of an APV valuation
Comparing and contrasting DCF and LBO Unlevered value
models Value of the tax shield
Sources and uses of funds Direct and indirect cost of leverage
Key drivers in an LBO model APV valuation and DCF valuation
From stand alone valuation to LBO analysis APV valuation in a steady state
The debt waterfall and initial capital struc- Calculating AP in a steady growth environment
ture Incorporating APV analysis in an LBO transac-
Assessing the IRR and initial optimisation of tion analysis
the capital structure
Case Study V: Where has value been
Case Study II: Participants use the stand created, modelling APV analysis for an LBO
alone valuation of the target to complete transaction
and LBO model
Case Study: Review and discuss the key
Assessing debt capacity for LBO financing terms in the management agreement
Financial interdependencies and how they should be structured in a
Financing growth management friendly manner
Sustainable debt
Target debt capacity assumed in a WACC
calculation, debt capacity and interest cover
Debt capacity in LBOs
Debt capacity multiples in practice and credit
analysis
The rating agency ratios
Additional constraints in practice
Max out calculation optimising the
structure with further constraints

Case Study III: Modelling the debt capacity

of the target using multiple and credit
analysis

Capital providers and their typical

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 Buying a Company - A Practitioners Guide
Date: 2 Oct, 15 Jan 2018, 15 May 2018, 01 Oct 2018
Location: London Standard Price: 595 + VAT
Membership Price: 476 + VAT

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Course Overview

Creating shareholder value through the pursuit of a successful M + A strategy has been shown to be
a far from risk-free activity. Buyers overpaying or using inappropriate financing methods can lead to
destruction of value and in some cases financial distress.

The course covers topics of risk and return, process, investigation and integration as a practical guide
to identifying and negotiating acquisitions.

Course Content

The Drivers of Growth Judging forecasts

Shareholder value Scepticism rules
The company life cycle Commercial factors
The importance of directors recognising Targets history
the value curve Recurring revenue
Risk and return Intellectual property
Relating risk to the life cycle phase of the Customer list
company / target
Product market growth and decline CASE STUDY: Reviewing company information
Evaluating niches, substitutes, value in to arrive at a value, taking into account
innovation qualitative and strategic factors
REVIEW: Comparison and contrast of the
lifecycle of three different companies, The Acquisition Process
highlighting how success or failure with Establishing acquisition criteria
acquisitions has determined their fate Target size and affordability
Potential synergies
ICI Market / competitor impact
Debenhams Regulatory factors
GKN Shareholder impact
Due Diligence
Growth through Acquisition Investigation prior to offer
Assessing the alternatives Public sources
Investment Private sources
JV Verification
Acquisition Contracts
Accounts
DISCUSION: Advantages and disadvantages Pensions
of each approach Employee disputes
Litigation
Determining the acquisition
Market objectives CASE STUDY: Reviewing summary information
Consolidating a fragmented market on a company to determine which areas
Building the value proposition need investigation and who should have
Management issues responsibility for the task
Assessing cultural fit
Price parameters Structuring the deal
Knowledge of comparative deals Earn-out / deferred consideration
Opportunity cost Non-compete undertakings
Is it a now or never deal Warranties and indemnities
Disclosure letters
REVIEW: The Ansoff Matrix, a handy way
to categorise potential risks in acquisition Acquisition Integration
strategies Success / failure factors
The importance of the integration team
Pitfalls to avoid Earn outs and accounting issues
Realism of synergies Incentivising key managers
Risks of prediction, cost and achievement Establishing clear reporting lines
Accounting standards
Who is the auditor, what principles are
followed

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 Advanced Negotiation Issues in M&A
Date: 18 Sep, 7 Nov, 29 Jan2018, 24 May 2018, 17 Sept 2018, 29 Oct 2018
Location: London Standard Price: 850 + VAT
Membership Price: 680 + VAT

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Course Overview

This programme is aimed at those with a working knowledge of the M&A process. It focuses on
negotiating the key commercial aspects of the transaction which impact value for both buyer and
seller and on creating the right framework and strategy for enhancing value to the seller or retaining
value for the buyer.

The simplistic view of M&A is that it is a bilateral process between buyers and sellers. Experienced
practitioners understand it is an organic process, which involves multilateral negotiations between
buyers/sellers on the one hand, and their respective advisers on the other hand. Additionally, there
are critical negotiating issues that arise, in parallel, between the parties, their own advisers and
between the advisors themselves (e.g. accountants debating the completion accounts, lawyers
debating warranties in the SPA).

To complicate matters, there are significant differences in approach between different types of sellers
and buyers. For example corporates have a different agenda to PE firms whilst owner/managers,
who invariably lack experience in M&A, often represent the biggest challenge. Last, the sellers
management can also have a malign influence on the sale process which requires delicate handling.

The programme is divided into two parts. The first part focuses on the soft negotiating issues which are
common to smaller deals but less relevant in larger auctions. The second part focuses on the technical
or commercial aspects where the real value can be gained or lost. These include the completion
mechanisms (completion accounts and locked box), the offer structure (e.g. cash free-debt free and
working capital adjustment), structuring the consideration, handling management and value leakage
through the warranties, disclosure and indemnities.

Finally, warranty insurance, long seen as an expensive and cosmetic solution, is experiencing rapid
acceptance in Europe and, increasingly, has emerged as a powerful negotiating tool. Last, the
programme reviews various solutions to closing the value gap between the parties and the pros and
cons of the various methods of achieving this.

Please note that this course covers some aspects that are also covered on the Sale & Purchase
Agreements course although the focus in this programme is on commercial aspects as opposed to a
more3 legalistic approach in the SPA course.

Course Content
General guidelines for effective Tips for handling your lawyers (and theirs)
negotiating Getting the best from the accountants
5 Key issues everyone should remember in Managing the other partys advisors
negotiating M&A
Why price isnt everything (10 aspects af- Managing the buyer and the sellers
fecting the value) Key differences in approach between corporate
The value matrix building blocks of the buyers and PE firms
price The duty to negotiate in good faith
Reconciling price vs. value (strategy) What it means in Europe and civil jurisdic-
what to look for tions
Three step approach to focus the negotia- Key risk areas & how to mitigate them
tions & avoid being side-tracked Position in the UK (its not a liars charter)
The art of making concessions how and Buying from corporate sellers
why they can help The agency cost issue & how it affects the
8 common mistakes in negotiating the deal deal
(& how to avoid them) Who is really running the deal?
Dealing with owner/ managers
Tactics for managing the advisors in the The psychology of buying from owner/man-
deal agers
Managing and choosing your advisors How to overcome problems with (inexperi-
enced) advisors/lawyers

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Course Content
them decision tree
How to differentiate your offer ... & Key areas for negotiation
close the deal
Dealing with multiple sellers CASE: Identifying the key aspects affecting
Specific problems when buying minori- the reconciliation from Enterprise to Equity
ty/majority stakes Value; techniques for estimating average
and normalised working capital
Managing conflicts with managers (who
are not the owners) Value Leakage: Reps, Warranties, Disclosure
Identifying the two major potential areas & Indemnities
of conflict and value erosion Reps and warranties whats the difference &
Hijacking or sabotaging the deal the 3 why it matters?
scenarios and strategies for managing Warranties - what are the main areas of risk
them Disclosure general tactics
Sweetheart deals - typical terms Dangers of too aggressive disclosure
Problem areas and how to mitigate Using disclosure to identify / mitigate risk
them (in advance) Indemnities - caps and collars
Other strategies for handing recalcitrant Tactics for limiting liability and value leakage
management Survival / time to assert claims & carve-
Managing the flow of information outs
Interaction with seller liability? Liability caps / baskets, de minimis & de
Reverse warranties & side letters do maximis
they work?
Tactics for minimising sellers risk Warranty Insurance a powerful
negotiating tool
Negotiating the Initial stages (pre- Rapid evolution of the market in Europe
signing the SPA) Seller vs buyer policies key differences, pric-
Heads of terms as a negotiating tool ing and typical terms
Pros & cons of using heads Interaction with the warranties
Guidelines for negotiating heads How buy-side policies can help the seller
Legal issues in re the heads (enforcea- Where sell-side policies can provide leverage
bility)
Negotiating aspects re the exclusivity Bridging the Value Gap on price
agreements Cash - how much cash is too much?
How to retain control & keep buyers Shares (listed)
honest Use and application
Using break fees as a negotiating tool Problems areas: market price, caps & col-
The confidentiality agreement lars
Their real purpose (its not confidential- Other pitfalls & how to avoid them
ity) Vendor loans
How to manage really confidential is- Use and application
sues (e.g. formula for Coca Cola?) Pros and cons for sellers and buyers
Contingent value rights undervalued tool
Structuring the Offer impact on value & Stub equity when to use it and why
price Anti-embarrassment ... what is reasonable?
The basic Offer structure cash free, debt Consultancy agreements - Where and how
free & working capital/net asset value ad- they can help
justment Earn-outs a tool for value arbitrage
Analysis of the five key value drivers / are- Anatomy of an earn-out
as for due diligence & value Key negotiation issues
Cash, debt, working capital, capex and Typical pitfalls for buyer
EBITDA/cash run rate Typical pitfalls for seller
Problematic areas and how to extract value
The trapped cash problem CASE: Identifying the key issues in a tricky
What is debt? disposal, discussing how best to negotiate these with the
Working capital why and how it other side and deriving the optimum deal structure in order
matters to resolve the key issues to the benefit of both buyer & seller
Two different approaches to completion:
Locked box vs Completion Accounts
How they can add / destroy value
When to use them and when to avoid

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 Advanced Negotiation issues in Financial Covenants
Date: 22 Sep, 26 Feb 2018, 12 Jun 2018, 24 Sep 2018
Location: London Standard Price: 695 + VAT
Membership Price: 556 + VAT

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Course Overview

The programme will review the impact of the draft ECB guidance on leveraged transactions.

This programme covers financial covenants in Loan Agreements and includes specific reference and analysis of the
terms and definitions as used in the LMA Senior Facilities Agreement for Leveraged transactions and covenants
which appear in the LMA Real Estate precedents but consideration will also be given to current developments
in the market particularly the larger syndicated (TLB-style) deals which no often include Springing Leverage
covenants. The programme will also cover the typical covenants encountered in Infrastructure and Project Finance
transactions

The loan market in Europe is bifurcating into two main approaches to loan documentation; smaller club and
bilateral deals which broadly follow the more lender-friendly LMA approach and larger syndicated TLB-style deals
which, increasingly, are being influenced by the high yield bond market and adopt a Cov-loose or Cov-lite approach
where some deals now have only one or two financial covenants and occasionally none at all.

The larger syndicated TLBs also vary in approach with 2 slightly different approaches depending on whether they
are English law or NY law (for example, the latter do not usually permit overcures or require prepayment of loans
from equity cure cash). Direct-alternative lenders also tend to adopt a more borrower-friendly approach to the
terms in the loan and the financial covenants.

Financial covenants are arguably one of the most heavily negotiated aspects of the Loan Agreement. Too often
some parties fail to understand the key issues that really matter, for example, they view the financial covenants in
isolation rather than appreciating they must be seen in the context of each particular capital structure. A second
pitfall is to spend too much time on which covenants apply rather than focusing on the key constituents of the key
terms in the financial covenant.

This course provides a detailed look at commercial aspects of financial covenants and looks under the bonnet at
the critical issues that arise in practice. This course provides an in-depth look at the covenants as set out in the
Loan Market Association precedent together with other covenants that might be used in practice. Reference is
made to the Debtxplained loan Database which tracks key terms in the larger syndicated deals.

Participants will gain an in-depth view of which covenants should be used and why together with a detailed analysis
of the constituents of the covenants and the sponsor friendly add-backs and other sponsor friendly techniques
used by borrowers to manipulate the covenants.

Following the release of the LMA precedent on Real Estate investment transactions, the course now includes a
section on financial covenants in real estate deals. On close examination there are some significant differences
between of the interest cover ratio in real estate deals and in leveraged transactions.

The programme will appeal to practitioners involved in leverage, real estate and infrastructure, such as Lawyers,
Private Equity professionals, Bankers in Lending (all departments), Corporate financiers, M&A advisors, Debt
advisory and Restructuring. Accounting professionals looking to expand their knowledge of this topic will also
benefit as many of the issues embrace legal /documentary considerations. The programme adopts a pan-European
approach to the topic but the presenter is able to discuss issues relevant in the USA in view of his exposure to
those markets.

To derive full benefit from the programme, it is essential that attendees have a basic understanding of the main
/ headline elements of a Profit and Loss account (Sales, EBITDA, EBIT etc) and a basic understanding of the
differences between P&L /Accrual Accounting on the one hand and Cash accounting on the other. A short module
summarising the key differences of these two approaches is available on request prior to the programme. It is to
be emphasised that participants DO NOT require an understanding of IFRS or GAAP as the programme is designed
to enable attendees to have enough basic knowledge to identify the key commercial issues.

Case Study:
Participants will be required to:- (a) calculate how to derive the key elements of the various covenants (b) identify
some of the more problematic components in the covenants (c) calculate the various covenants and (d) explain
the pros and cons of each of the covenants and why they may be appropriate for one deal but not another.
The calculations are relatively simple and are designed to explain the basic principles and reinforce learning.
Accounting knowledge is not required but would be helpful.

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Course Content

Introduction - Interaction of capital Treatment of PE Debt and Vendor Loans

structure & financial covenants Impact of Debt Buybacks and impact on
Types of instruments & impact on the finan- Debt
cial covenants Treatment of Trapped cash on Debt
Impact of Capital Structure on Financial Finance charges & Net Finance Charges
Covenants Tricky issues
Bullet loans Financial Indebtedness & impact on the cove-
Impact of PIK nants
Current market trends Cov-lose and cov- Topical matters affecting the covenants
lite review Impact of Leasing on EBITDA (Operating vs
Finance Leases)
Key financial ratios used by Lenders and Forthcoming changes in IFRS & impact on
typical LMA ratios covenants
Market based financial ratios Capitalising costs
The four LMA covenants in leveraged deals Forex gains/losses on Intra-group transac-
Leverage ratios (Balance sheet and P&L tions
ratios) Debt buy-back gains & impact on EBITDA
Total Debt / EBITDA Restructuring costs
Senior Debt/ EBITDA Exceptional, extraordinary items & other
Interest coverage ratios one-off, non-recurring items
EBITDA / Total interest Related party income
EBITDA / Senior Interest
EBITDA / Cash interest Current market trends
[EBITDA Maintenance Capex] / Cash Key differences between large vs mid cap vs
Interest smaller deals
[EBITDA Capex] / Cash Interest Cov-lose
Cash flow cover (DSCR) What it covers
CADS / Total Debt Service typical ratios used
CADS / Senior Debt service Cov-lite
Capex covenant What it covers,
Baskets - LMA vs Market approach typical ratios used
Carry forward / carry back amounts - Springing Leverage covenants
LMA vs Market approach When should the ratio spring
Add-backs LMA vs Market Calculating the constituents
When is the covenant tested
A closer look at the key constituents of Problem areas
the ratios per LMA and market approach
EBITDA (note: is a defined term in the Loan Other considerations
Agreement, it is not a GAAP or IFRS term) How many covenants are needed
Simplistic calculation of EBITDA Which companies should be included
Consistency of application (dealing with Definition of Group
Accounting changes under IFRS, GAAP Adjusted EBITDA (effect of acquisitions &
etc) disposals)
Exceptional items LMA approach, UK Dealing with Short periods (i.e. Less than
GAAP vs IFRS 12 months post the deal)
Sponsor friendly add-backs Periods shorter than 12 months
Discontinued Operations LMA, different Typical pitfalls to avoid
approaches of UK GAAP vs IFRS Frequency of application: When should the
Derivative & Financial Instruments - UK ratios be tested
GAAP vs IFRS Historic TTM/LTM, forecast, both (quarterly,
Pension Items - UK GAAP vs IFRS monthly)
Total [Net] Debt and Senior Total [Net] 2 options per LMA
Debt What level of Headroom is appropriate
Borrowings per the LMA Impact of Clean-ups
Simplistic calculation of Net Debt Additional role of the financial covenants on
Example of net debt items the Deal

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Course Content

Margin ratchets Treatment of cash balances (what about

Guarantor Coverage Test swaps)
Cash sweeps re distributions and dispos- Treatment of reserve accounts
als Using the correct Discount rate
The Compliance Certificate Dealing with multiple types of debt
Requirements per LMA Sch 9 Typical ratios in key sectors
Current commercial requirements Pros and cons
When does the breach occur Project Life cover
Ramifications of the breach for Lender Differences to Loan life cover
(traps to avoid) Tricky issues
Equity cures Using the Buffer test
Equity cures - What are they, good or
bad
What should be cured (EBITDA, Cash-
flow, Debt)
Treatment of overcures
Is the cure EBITDA? And if yes what ef-
fect will this have
How should the cash be used? (Why re-
payment of debt is not appropriate)
Deemed cures what are they and are
they worth having?
Review of recent topical case law lessons
from Ideal Standard

Covenants used in Real Estate deals

The LMA financial covenants
Interest cover constituents, pros and cons
Historical
Projected
Key differences from the leveraged ratio
Calculation periods
Passing Rental what is included and
what is excluded
Difficult / contentious aspects - break
clauses, non-rental income, costs/ex-
penses
Finance costs treatment of hedging
Loan to Value constituents, pros and cons
Items to be netted off
Loan to Cost - constituents, pros and cons

Project finance / Infrastructure

Annual Debt Service Coverage ratio (AD-
SCR)
Historic vs projected test
Definition of cash
Definition of Debt service
Typical ratios in key sectors for covenant
breach
Treatment of accruals/forward sales/op-
tions/hedging
Use and application of the ADSCR
>> Distribution lockup thresholds, draw
Loan/Bond Life cover
Definition of CADS

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 Selling a Company - A Practitioners Guide
Date: 4 Oct 2017, 4 Oct, 17 Jan 2018, 17 May 2018, 03 Oct 2018
Location: London Standard Price: 595 + VAT
Membership Price: 576 + VAT

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Course Overview

Selling a company to achieve a vendors target price is frequently a time-consuming and complex
process. In addition to the legal and accounting considerations there are issues of presentation,
timing and tactics that are important elements of the campaign to close a successful sale.

The course covers the practical steps that are required to plan, negotiate, and close a successful
sale. Valuing the business to be sold and the effective presentation of the commercial attractions
of the business are key elements, as are choosing the appropriate advisers and running a
competitive auction.

Course Content

Initiating the Process

Overview of the Process
Choosing advisers
Motives and objectives of the vendor
Investment bank, Merger brokers, Ac-
Which outcome is preferred
countants, Other
Cash only
sale with honour
Exercise: Reviewing the terms of a
Management buyout
mandate letter.
IPO
Attendees are given a draft to edit and
Timescale
criticise
Preparing the Company for sale Agreeing the mandate
optimising the operations Fees
removing skeletons, resolving relat- Retainer, success, no go
ed party conflicts Exclusions
resolving accounting / audit issues Companies and territories
tightening up provisions, write offs, Time limits
stock obsolescence Indemnities
clearing legal points Preparing key documents
employee issues Information memorandum
customer / supplier disputes Support material
choosing advisers Confidentiality undertakings, product
tax considerations information
the vendors position Due diligence pack
company PAYE, corporation tax Reasons for, use of vital data rooms
Quiz: What are the top ten objective Management preparation
of a vendor Confidentiality
Conflicts of interest
Assessing the value of the business The sale team
traditional metrics Presentation material
net assets, comparative ratios, DCF,
Enterprise Value The Sale Process
Other factors
The cost / risk / timescale issues in
IPR, Market share, Customer base,
A trade sale
Niche products
Buyout
Strategic value to a buyer
IPO
Exercise: Calculating the value of a
Trade sale approaches
business using different metrics
Public auction
Private auction
Bilateral negotiation
Organising an auction

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Course Content

Identifying the purchasers company sale to assess: the value of

Tiering prospects into probables, the business, the most likely buyers
possibles, maybe
Defining the deadlines Sealing the deal
The importance of realism Earn-outs
Contact and confidentiality Bridging the valuation gap
Dealing with large company buyers Warranties, disclosure letter
Judging the offers Buyer / vendor conflict
>> Will a no price offer work? Time limits, caps
Conducting the second stage discus- Completion accounts
sions Comfort letters
Company and management visits Alternative outcomes
Preferred bidder and exclusivity IPO, timescale
How long for exclusivity? MBO, management conflicts
Post exit lock-in
CASE STUDY: Reviewing an Ongoing relationship
information memorandum on a

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 Mergers & Acquisitions (M&A) Course
Date: 2-5 Oct 2017, 15-18 Jan 2018, 15-18 May 2018, 01-04 Oct 2018
Location: London Standard Price: 2,260 + VAT
Membership Price: 1,808 + VAT

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Course Overview

This four day M&A course covers all aspects of buying, selling, valuing private companies and
management buy-outs.

The first day of this mergers & acquisitions course covers creating shareholder value through the
pursuit of a successful M + A strategy has been shown to be a far from risk-free activity. Buyers
overpaying or using inappropriate financing methods can lead to destruction of value and in some
cases financial distress.

The second day of this mergers & acquisitions course covers the topics of the financial ratios used in
comparable company valuation, creative accounting, the cost of capital, forecasting and discounting
free cash flow. Exercises include the use of an Excel spreadsheet as input to valuing a business and,
accordingly, attendees are requested to bring a laptop to the course.

The third day of this mergers & acquisitions course covers the practical steps that are required to plan,
negotiate, and close a successful sale. Valuing the business to be sold and the effective presentation of
the commercial attractions of the business are key elements, as are choosing the appropriate advisers
and running a competitive auction.

The fourth day of this mergers & acquisitions course covers the principles and practicalities involved in
arranging and negotiating a management buyout. In addition to the legal issues to be addressed, the
use of bank debt and other financial instruments is examined in the context of developing a workable
structure for the deal.

Course Content
Determining the acquisition
Day 1: The Drivers of Growth Market objectives
Consolidating a fragmented market
Building the value proposition
The Drivers of Growth Management issues
Shareholder value Assessing cultural fit
The company life cycle Price parameters
The importance of directors recognising Knowledge of comparative deals
the value curve Opportunity cost
Risk and return
Is it a now or never deal
Relating risk to the life cycle phase of the
company / target
Product market growth and decline REVIEW: The Ansoff Matrix, a handy way
Evaluating niches, substitutes, value in to categorise potential risks in acquisition
innovation strategies
REVIEW: Comparison and contrast of the
lifecycle of three different companies, Pitfalls to avoid
highlighting how success or failure Realism of synergies
with acquisitions has determined their fate Risks of prediction, cost and achievement
ICI Accounting standards
Debenhams Who is the auditor, what principles are
GKN followed
Growth through Acquisition Judging forecasts
Assessing the alternatives Scepticism rules
Investment Commercial factors
JV Targets history
Acquisition Recurring revenue
Intellectual property
DISCUSION: Advantages and
Customer list
disadvantages of each
approach

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Course Content
Review: Was the near collapse of Quindell
CASE STUDY: Reviewing company inevitable?
information to arrive at a value, taking into
account qualitative and strategic factors Accounting Valuation Metrics
Asset and net asset valuations
The Acquisition Process Dividend-based models
Establishing acquisition criteria Dividend yield
Target size and affordability Dividend discounting
Potential synergies Application and drawbacks of dividend mod-
Market / competitor impact els
Regulatory factors Earnings-based
Shareholder impact Price / earnings ratios
Due Diligence P/E strengths and weaknesses
Investigation prior to offer PEG ratios
Public sources Enterprise value
Private sources
Verification Exercise: Valuation of a business using
Contracts different metrics
Accounts
Pensions Comparable Company Valuation Issues
Employee disputes Is the comparability achievable?
Litigation Accounting principles
Averages, medians, outlines
CASE STUDY: Reviewing summary Listed vs private
information on a company to determine Sustainability of earnings
which areas need investigation and who Business model flexibility
should have responsibility for the task
Exercise: Project Oxford, using comparable
Structuring the deal company techniques to value a company for
Earn-out / deferred consideration acquisition
Non-compete undertakings
Warranties and indemnities Calculating the Cost of Capital
Disclosure letters Assessing the cost of debt
Calculating the cost of equity
Acquisition Integration The risk free rate
Success / failure factors Equity premium
The importance of the integration team Beta
Earn outs and accounting issues The weighted average cost of capital
Incentivising key managers The flaws in the capital asset pricing model
Establishing clear reporting lines Alternative approaches
tax considerations
the vendors position Exercise: Calculating the cost of equity and
company PAYE, corporation tax the weighted average cost of capital

Day 2: The Cash Flow Approach to Valuation

Valuation Principles The time value of money
Value to whom? Calculating the discount rate
Price and intrinsic value Forecasting free cash flow
The risk / return trade off Calculating FCF
Strategic risk Identifying value drivers
Terminal value
The Accounting Approach
Accounting measures of performance and Exercise: Discounting free cash flow to
value arrive at a value per share
Problems of the accounting approach Exercise: Project Media. Using an Excel
Are profits relevant? spreadsheet and given assumptions to
GAAP vs IFRS arrive at a value of a company that is an
Creative accounting acquisition target.
How to find it
Recent examples

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Course Content
Fees
Project Media II. Varying inputs, in Retainer, success, no go
particular the debt / equity mix of the Exclusions
acquisition financing, to consider the Companies and territories
maximum price that could be paid for the Time limits
target Indemnities
Preparing key documents
Day 3: Information memorandum
Overview of the Process Support material
Motives and objectives of the vendor Confidentiality undertakings, product
Which outcome is preferred information
Cash only Due diligence pack
sale with honour Reasons for, use of vital data rooms
Management buyout
IPO Management preparation
Timescale Confidentiality
Conflicts of interest
Preparing the Company for sale The sale team
optimising the operations Presentation material
removing skeletons, resolving related
party conflicts The Sale Process
resolving accounting / audit issues The cost / risk / timescale issues in
tightening up provisions, write offs, A trade sale
stock obsolescence Buyout
clearing legal points IPO
employee issues Trade sale approaches
customer / supplier disputes Public auction
choosing advisers Private auction
tax considerations Bilateral negotiation
the vendors position Organising an auction
company PAYE, corporation tax Identifying the purchasers
Tiering prospects into probables, possi-
Quiz: What are the top ten objective of a bles, maybe
vendor Defining the deadlines
The importance of realism
Contact and confidentiality
Assessing the value of the business Dealing with large company buyers
traditional metrics Judging the offers
net assets, comparative ratios, DCF, En- Will a no price offer work?
terprise Value Conducting the second stage discussions
Other factors Company and management visits
IPR, Market share, Customer base, Niche Preferred bidder and exclusivity
products
How long for exclusivity?
Strategic value to a buyer
CASE STUDY: Reviewing an information
Exercise: Calculating the value of a
memorandum on a company sale to assess:
business using different metrics
the value of the business, the most likely
buyers
Initiating the Process
Choosing advisers
Sealing the deal
Investment bank, Merger brokers, Ac-
Earn-outs
countants, Other
Bridging the valuation gap

Warranties, disclosure letter
Exercise: Reviewing the terms of a Buyer / vendor conflict
mandate letter. Time limits, caps
Completion accounts
Attendees are given a draft to edit and Comfort letters
criticise Alternative outcomes
IPO, timescale
Agreeing the mandate MBO, management conflicts

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Course Content
Warranties and indemnities
Post exit lock-in Investor protection
Ongoing relationship New Memo & Arts
Incorporating P.E. control elements
Day 4: Tag along and drag along
The Growth of Private Equity and Control of the exit
Leveraged Buyouts Veto rights for private equity
Academic rationale for the use of leverage Control of management
Modigliani/Miller theory Management
Michael Milkens research Jensen and Meckling agency theory
Growth of shareholder activism Why buyouts work
Reviving under performers The envy ratio
Changes in company law Management incentivisation
The development of the European high Agreeing the ratchet
yield bond and securitisation markets Carrot and stick
Good leaver / bad leaver provisions
The Principles of Leveraged Finance Covering under performance
The use of debt to drive equity values
Cash flow management Exercise: Agreeing the terms of the envy
Reducing debt to drive equity value ratio
Operational improvements
Building need to have Identifying and Closing a Good Transaction
Incentivisation of management Ideal company characteristics
Getting rich together The three golden rules
Cash-capture clauses MBO / MBI
Assessing management strength
Exercise: Good or Bad LBO? Meeting vendors expectations
Structuring the deal
Discussion of recent transactions to see Avoiding conflicts of interest
which ones the attendees would do, Recognising the risks of multi-layered
and what lessons can be learned about financing
Due diligence
elements of success or failure
Investigation and verification
Tie-in with contract terms
Structuring the transaction Structuring the debt appropriate to the busi-
Target IRR ness
Assessing the return appropriate to the
risk Discussion: How to finance the acquisition
Assessing debt capacity
of Manchester United. The Man U accounts
Forecasting future cash generation
Senior / mezzanine debt mix are reviewed with the object of deciding
Judging asset values how to finance its acquisition. Answers
Forecasting exit values are compared to the actual result.
Consideration of non-bank finance
High-yield bonds
Terms and size of issue Exit
Second lien debt Control by P.E. house
>> Too much debt? IPO
PIK finance Second round financing
Saint or sinner? Trade sale
Vendor loan notes The living dead
Making the deal look good

Case Study: Based on information

provided attendees are tasked with
structuring the finance for an MBO.
Answers are discussed to identify the
critical elements in the financing

Legal elements

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 Negotiating Heads of Terms (LOIMOU) & Related Issues
Date: 19 Sep, 9 Nov
Location: London Standard Price: 725 + VAT
Membership Price: 580 + VAT

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Course Overview

Whilst the Sale and Purchase Agreement remains the most critical document in private M&A transactions,
sophisticated practitioners understand that the die is often cast long before that if the parties have concluded
Heads of Terms (also LOI, MOU). The Heads are perhaps even more important than the SPA since, if they
are poorly drafted, they can expose the parties to potential liability even if the deal does not proceed (e.g.
the duty to negotiate in good faith) and/or inadvertently create a binding obligation to conclude the deal on
unfavourable terms if they omit suitable CPs; for example, not making the deal conditional on adequate due
diligence or available financing or being unable to adjust the purchase price later when the assumptions on
which the initial price was based, differ post due diligence.

Whiles the Heads are vital, they often dovetail with other key aspects in the deal particularly the Confidentiality
(the NDA) and the Exclusivity. Whilst these aspects are often included in separate documents they may also
appear in the Heads themselves. They play important role in the deal in differing ways. The NDA is often the
first point of friction between the parties and thus sets the tone for the negotiations that follow. Its rationale
is often misunderstood by many practitioners; whilst it is true that confidentiality is critical in deals with
proprietorial IP, they offer other benefits to sellers and even the ultimate buyer too.

The programme also reviews other critical documents and elements of the M&A process which precede the
SPA but which are inextricably linked with the final SPA. For example, due diligence is inextricably linked with
the warranties, disclosure and indemnities but it is vital to strike a balance which enable buyers to make an
informed view on the target whilst protecting key commercial information on the target if the deal does not
proceed. In this context, the data room (and data room rules) play an important part in this but also giving
the seller insight into the buyers thinking.

The programme also covers other ancillary issues and documents and aspects of the deal such as Process
Letters, Terms of Engagement (of the advisors), an overview of the Information Memorandum and the
important commercial elements.

The programme is aimed at those involved in M&A transactions and is designed to focus on the key legal and
commercial issues of the deal. It will appeal to lawyers, corporate finance advisors, bankers and principals
in the UK and Europe. Please note the programme does not go into any detail on locked box or completion
accounts as these aspects are covered in some detail in the Advanced Negotiation Issues in M&A course.

Please note the Sale and Purchase Agreement is NOT covered in this programme.

Course Content

Heads of Terms (Heads) UK vs Europe/ Civil law

Traps for the unwary
Tactical matters Agreements to Agree
Whats in a name & does it matter Heads,
Term sheet, LOI, MOU etc Parties, deal structure, price &
Rationale & Purpose consideration
Are they always necessary? The Parties (and any guarantors)
7 key advantages of using Heads Description of the proposed transaction
4 disadvantages and how to mitigate them Deal structure
Format of Heads Full title full title guarantee' and 'limited
Detailed vs short title guarantee'
Who prepares them Details of the Purchase Price
Fixed price, a range or to be determined
Key legal issues to consider Basis/Assumptions on which the price is
Legally binding or not (q.v. RTS Flexible Sys- based (why this matters)
tems case) Valuation assumptions
Clauses which should not be legally bind- The purchase price mechanism (covered
ing briefly)
Clauses which should be legally binding Key caveats and avoiding pitfalls
Position in Europe / Civil law Nature and timing of the Consideration
Position in the UK When the consideration will be paid
Impact of Subject to Contract (q.v. Jire- Nature of the consideration e.g. cash
house Capital case) shares loans etc
Regulatory matters Financial Promotion?
(21, Financial Services and Markets Act The Main Conditions
2000) How and why this matters to the buyer
The Duty to negotiate in Good Faith Required approvals - clarity is key
Due diligence

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Course Content
Non-solicitation of staff, customers, suppli-
Arrangements & requirements ers
Access to key staff Non-disclosure of discussions
Data rooms Enforcement and remedies
Completing a definitive, legally binding SPA Practical steps for the Seller
Who prepares this & why that matters Exclusivity
Material Adverse Change Rationale
Scope Format separate document or in the Heads
Commercial matters, Legal & Regulatory Lock outs vs Lock ins (are latter enforceable)
proceedings Duration - Potential problems reasonable
Commercial contracts & licences / CoC period
Completion issues Pros and cons
Financing Sellers view
Terms of financing inter-relation with the Buyers view
financing documents Main clauses
Pre-completion restructuring Conduct during the Exclusivity Period
Timing - Milestones & long-stop dates Approaches by 3rd parties
Access during the Exclusivity period
Limiting Liability Representations, Relief and Remedies
Warranties & Indemnities Announcements
Liability for pre-contractual statements Termination & Waivers
Dealing with the Warranties Costs
General or Specific approach to warranties Status of the Exclusivity
Scope Issues in re fiduciary duties
Tactical matters for the parties
Warranty insurance Process letters
Background and purpose
Miscellaneous Description of the process
Transaction documents Details / requirements relating to price
Migrating the Heads to the SPA 8 key clauses
Interaction with other key documents Review of an example of first and second
Non-compete - Issues re employees and round
customers
Costs & Break Fees Information memorandum (on Target)
Triggers for break fees Key tips on writing a good IM
Legal issues Is it a penalty? Overview of the main sections
Fiduciary duties Potential problem areas
Financial assistance Nature of the Recipient & FSMA etc
Other agreements Health warning
Rights of third parties Communications
Governing law and jurisdiction Verification
Rationale
Engagement letters Other matters (Basis of preparation, liabili-
Defining the deal ty)
Role & scope
Remuneration & expenses Due diligence
Contentious issues - Abort and Tailgunner Hold harmless letters / (non-) reliance letters
fees Who controls the DD process seller or buyer
Duration and Termination Why it matters
Liability and Limiting liability Key areas of DD
Lawyers
Confidentiality letter / NDAs Real purpose Accountants / tax
of NDAs Commercial DD
Sellers perspective Insurance
Buyer issues Environmental
Long vs Short form
Confidential Information defined Data room rules
Form, Source, Method Data rooms generally
Dealing with Extremely sensitive information How it can affect the deal (monitor buyer in-
Residual clause terest)
Authorised Persons defined (Virtual) Data room rules
Seller and buyer issues Clean team role, typical use
The 9 Key Undertakings by the Buyer
When the deal fails Return or Destroy
Potential problem areas for the buyer
Enforced Disclosure
Other ancillary terms
No offer, representation, warranty or li-
cense
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Modelling For Mergers & Acquisitions - A Practical 3-Day Workshop
Date: 16-18 Oct, 2017 19-21 Feb 2018, 25-27 Jun 2018, 01-03 Oct 2018
Location: London Standard Price: 1,800 +VAT
Membership: 1,440 + VAT
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Course Overview

This course covers the key elements of an acquisition or merger, from the initial stand-alone valuation of
the target to the more complex accounting and modelling issues to be considered and finally analysing
and assessing the value created by synergy benefits and leverage.

This course is run in an interactive, participative format, where participants learn by doing. The key
concepts covered in the main teaching sessions are punctuated and illustrated by detailed case and
modelling work.

The approach has been designed to equip participants to put key concepts into practical use immediately.
Participants will be led through a comprehensive review of analysis practices, from initial principles
through to more advanced techniques that are used in transaction analysis.

As part of their work on this course participants model transactions based on real-life companies and
scenarios.

By the end of this course participants will understand:

Drivers on M&A
How to model integrated financial statements
How to use financial statements to value a business
How to model the balance sheet impact of transactions
How to incorporate synergies into modelling work
How to differentiate between financing and operating synergies
How acquisitions can be structured

Much of the course work involves Excel modelling and analysis, equipping participants with
the tools to analyse leveraged acquisitions:
Building up from partially-complete models
Working with integrated financial statements
Developing the acquisition structure and modelling instruments
Running scenarios, iterating and optimising

Each participant should bring a laptop with USB port to the course to facilitate modelling
work.

Course Content
What methodologies could we use?
Day 1
How should we define firm value? Equity v.s. enter-
prise value
M&A model build up: the starting point Calculating free cash flow before financing
Understanding and calculating WACC
Modelling integrated financial statements Discussion calculating WACC
Model structure Key issues with a two stage DCF valuation WACC
Key forecast ratios and terminal value assumptions
Sourcing and cleaning historic data
What makes a good model? Modelling - valuation: participants calculate the
cost of capital and complete a DCF valuation for
the target company, producing a stand-alone
Modelling integrating financial statements:
valuation as a cross check to the acquisition price
participants complete a partially-developed
financial model for a public quoted company
Day 2
which integrates P&L, balance sheet and cash
flow. This company will be the target company
Accounting for corporate transactions
used in the merger analysis
Different types of transaction and how they are
Modelling stand-alone valuation modeled in practice
Overview of valuation methodologies Consolidation accounting under the current IFRS 3
What do investment banks do? an IAS 27

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Change of control triggers capital structure

Accounting for non-controlling interests (NCI)
Accounting for disposals Modelling bringing it all together: participants
Partial disposals creating a NCI complete a complex merger model for an
Partial disposal loss of control acquisition of the target business incorporating
Recent changes to acquisition accounting under synergy analysis and varying capital structure.
IFRS The transaction is analysed on an accretion/
Definition of control dilution analysis and a wealth creation/return on
Calculation of goodwill capital analysis

Modelling: delegates complete a variety of At the end of this session participants will have a
transaction models incorporating all types of working acquisition model incorporating a variety
corporate transaction and calculate the effect of of different forms of transaction analysis
a transaction on a set of consolidated accounts
in preparation to perform a merger analysis Course conclusion: best practice in transaction
with the target business and an acquirer analysis
Participants will have improved their understanding
Acquisition finance of and have had experience of modelling mergers
Types of transactions and synergies and acquisitions from first principles
Availability of synergies and problems in achiev- Simple and clear reference Excel models - provid-
ing them ing participants with a platform for future internal
Methods available for valuing synergies modelling efforts and aiding decision making
Key differences between public vs. private deals, Participants who, at the end of the course, under-
recommended vs. hostile bids stand the drivers on transactions and how transac-
Choices for growth: acquisition vs. organic vs. tions can be modified to suit the various parties
joint venture
Defence strategies for target companies resisting
a hostile bid
What our clients are saying about the course
Case study: Participants calculate synergies for
a case company
Methodical and clear. Liked how it went
through whole process of linking up
Day 3 financial statements
Structuring acquisition finance
Once price has been agreed, how is it paid? Cash
vs. Shares
Financing choices for raising cash for an acquisi-
tion: Debt vs. Equity
Calculating the success of a deal, accretion vs
value creation
The nature of equity instruments
The different risks and rewards accruing to differ-
ent parties
The impact of loan stock, convertibles and prefer-
ence shares on WACC
Calculating returns to key participants
Case study: Calculating accretion/dilution and
the effect of hybrids on cost of capita

Merger modelling case study

Completing a merger model
Getting to DCF valuation for the combined busi-
ness
Combined WACC
Valuing operating synergies
Valuing financing synergies
Accretion/dilution analysis vs wealth creation
Sense-checking the output and adjusting the

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