AlternativeApproachestoValuation收购与兼并(共50张PPT)

M&A-GuoboHuang1Lecture4,AlternativeApproachestoValuationPartA:ValuationapproachesPartB:CasestudyReading:Chs9,10日期M&A-GuoboHuang2Chapter9-2PartA,valuationapproachesValuationcriticalinM&AsFrameworkessentialtodisciplinevaluationestimates日期M&A-GuoboHuang3Chapter9-31.ComparableCompaniesMethodGroupofcompaniescomparablewithrespectto:ProductsFutureprospectsKeyratiosarecalculatedforeachcompanyKeyratiosareaveragedforgroupAverageratiosappliedtoabsolutedataforcompanyofinterest日期M&A-GuoboHuang4Chapter9-4IndicatedmarketvaluesobtainedfromeachratioValuationjudgmentsaremadeAdvantagesLimitations日期M&A-GuoboHuang5Chapter9-52.ComparableTransactionsMethodMarketvaluereferstotransactionsinacompleteddealMoredirectlyapplicablethancompanycomparisonsMaybedifficulttofindtransactionswithinarelevanttimeframe日期M&A-GuoboHuang6Chapter9-63.SpreadsheetApproachtoValuationandMergersProcedureHistoricaldataforeachelementofbalancesheet,incomestatement,andcashflowstatementarepresented:7to10yearsDetailedfinancialanalysisisperformedtodiscoverfinancialpatterns日期M&A-GuoboHuang7Chapter9-7AdditionalanalysisBusinesseconomicsofindustryinwhichcompanyoperatesCompany'scompetitivepositionAssessmentsoffinancialpatterns,strategies,andactionsofcompetitorsBasedonanalysis,relevantcashflowsareprojectedProceduressimilartocapitalbudgetinganalysisCapitalbudgetingdecisionsSpreadsheetprojectionsProvidegreatflexibilityinprojections日期M&A-GuoboHuang8Chapter9-8NPVofacquisitionobtainedfromsumoffreecashflowsdiscountedatapplicablecostofcapitalAdvantagesofspreadsheetapproachExpressedinfinancialstatementsAnydesireddetailofindividualbalancesheetorincomestatementaccountsFlexibilityinformulatingprojections日期M&A-GuoboHuang9Chapter9-9DisadvantagesofspreadsheetapproachNumbersusedinprojectionsmaycreateillusionthattheyareactualorcorrectnumbersMaylacklinkbetweenprojectednumbersandbusinesslogicMaybecomehighlycomplexDetailsmayobscureimportantdrivingfactors日期M&A-GuoboHuang10Chapter9-104.FormulaApproachNorealdistinctionbetweenspreadsheetapproachandformulaapproachBothusediscountedcashflowanalysisSpreadsheetapproachexpressedinformoffinancialstatementsoverperiodoftimeFormulaapproachsummarizessamedataincompactformFormulaapproachhelpsfocusonunderlyingdriversofvaluation日期M&A-GuoboHuang11Chapter9-11DevelopmentofcompactvaluationformulasValuationnecessarilyrequiresforecastsUsuallyassumessystematicrelationsbetweentimeperiods,variablesKeyvariablesandrelationshipsTotalcapital(At)Investment(It):definedasthechangeintotalcapitaloverthepreviousperiod(At-At-1)

日期M&A-GuoboHuang12Chapter9-12Netoperatingincome(Xt)definedasafunctionoflastperiod'stotalcapital,i.e.,

Xt=aAt-1whereaisaconstantAfter-taxnetoperatingincome=Xt(1-T)Profitabilityrate(Rt):definedintermsofchangeinnetoperatingincomeasaresultoftheinvestmentinthepreviousperiodAfter-taxprofitabilityrate=Rt(1-T)=rt:definedintermsofchangeinafter-taxnetoperatingincomeasaresultofinvestmentinthepreviousperiod

日期M&A-GuoboHuang13Chapter9-13Investmentrequirements,opportunitiesperdollarofafter-taxcashflows(b):definedasratioofinvestmenttoafter-taxnetoperatingincomeGrowthrate(g):definedasrateofchangeinafter-taxcashflowsorinnetoperatingincomeInthismodel,gisdeterminedbytheproductofothervariables:theinvestmentratetimestheprofitabilityrate日期M&A-GuoboHuang14Chapter9-14InsightsfromuseofformulaapproachWhenrisgreaterthank,increasinginvestment(b)resultsinhighergandhighervaluesValuationisverysensitivetothecostofcapital(k)usedinanalysisSensitivitytonandTpredictableindirectionandmagnitude日期M&A-GuoboHuang15Chapter9-15LimitationsoftheformulaapproachLessflexibilityinreflectingforecastsforindividualyearsCalculationsusefinancialstatementdatanotdirectlyshownintheformulas日期M&A-GuoboHuang16Chapter9-165.CostofCapitalMeasurementStepsinvolvedincalculationofcostofcapitalCalculatecostofequitycapitalCalculatecostofdebtFormulateapplicablefinancialstructureorfinancialproportionsApplyapplicablefinancialproportionstocostofequityandcostofdebtFinalresultisweightedcostofcapital日期M&A-GuoboHuang17Chapter9-17CostofequityCapitalAssetPricingModel(CAPM)BondyieldplusequityriskpremiumCostofequity=Averageyieldtomaturityoffirm'sbond+historicalaverageindustryequityriskpremiumoverdebtyieldFortheindustry,analyzehistoricalreturnstoequityascomparedwithaverageyieldtomaturityonbondsInvestor'saveragerealizedyieldHistoricalreturnoninvestmentintheindustryReturns=Changeinstockprice+dividendyield

日期M&A-GuoboHuang18Chapter9-18DividendgrowthmodelRequiredreturnonequityisexpecteddividendyield(D1

/S0)plusexpectedgrowthrateindividends(g)EstimatingthecostofequitycapitalUseinformationgeneratedbyfinancialmarketsEstimatecostofequityusingmultiplemethodsConsiderestimatesforothercompaniesinsameindustryUsejudgmenttoarriveatanestimate日期M&A-GuoboHuang19Chapter9-19CostofdebtCostofdebtcalculatedonanafter-taxbasisbecauseinterestpaymentsaretaxdeductibleAfter-taxcostofdebt=kb(1-T)Before-taxcostofdebt,kbCanbeobtainedfrompromisedyieldstomaturityoffirm'soutstandingpubliclyheldbondsCanbeobtainedfrompublishedpromisedyieldstomaturitybasedonbondratingcategory日期M&A-GuoboHuang20Chapter9-20CostofpreferredstockClaimsofpreferredstockholderstakeprecedenceovercommoninliquidationPreferredstockandtaxesPreferredstockdividendsarenotdeductiblefortaxpurposesforissuerAhighpercentageofdividendsreceivedbyonecorporationfromanotherisnontaxableYieldsonpreferredstockslightlybelowyieldsonbondsofsimilarcompaniesMostpreferredstocksarevaluedasperpetuities日期M&A-GuoboHuang21Chapter9-21MarginalCostofCapital(MCC)Costofcapital,k,isweightedaverageofmarginalcostofequity,debt,andpreferredstockMethodologyfocusesoncurrentmarketopportunitycosts,notbookorhistoricalcostsMayusebookormarketvaluestoprovideguidelinesUsejudgmenttoestimatetargetfinancialproportions日期M&A-GuoboHuang22Chapter9-226.InfluenceofInflationCurrentpriceofstockorcurrentvalueofcompanyalreadyincorporatesexpectedrateofinflationValuationformulaUsinganequationwithrealgrowthandrealcostofcapitalgivesthesameresultasusinganequationwithnominalexpressions

日期M&A-GuoboHuang23Chapter9-23Whenreplacementinvestment(innominaldollars)isgreaterthandepreciationexpense,theequationsareadjustedPracticalproblemsDifficulttopredictfutureratesofinflationRelativepriceandcoststructurechangeunderinflationInflationaffectsdifferentstakeholdersunequallyDistortingeffectsofinflationposeproblemsforallvaluationmethodologies

日期M&A-GuoboHuang24Chapter9-247.SummaryAllvaluationmethodshavestrengthsandweaknessesEmploymultiplemethodsofvaluationintakeoveranalysisValuationshouldbeguidedbyabusinesseconomicsoutlookforthefirmsUltimatelyjudgmentsarerequiredforvaluations日期M&A-GuoboHuang25Chapter10-2PartB.CaseStudyMultipleApproachestoValuationAreIllustratedbyanIn-DepthCaseStudyofChevronTakeoverofGulf(1984)日期M&A-GuoboHuang26Chapter10-3EventAnalysisofChevronPurchaseofGulfChevronwonauctioninMarch1984TransactiontermsCashbidof$80persharePretakeoveractivitypriceofGulfwas$39Gulfhad165.3millionsharessototalpricewas$13.2billionPremiumwas$41or105%Transactionwastaxableandtreatedasapurchase日期M&A-GuoboHuang27Chapter10-4EventreturnsChevronhadapositiveeventreturnof$2billionandGulf$6.8billionTotalpositiveeventreturnwas$8.8billion日期M&A-GuoboHuang28Chapter10-5ComparableTransactionAnalysisInfiveprioroilcompanypurchasestheweightedaverageratioswerecalculatedTransactionvaluetobookequity2.35TransactionvaluetoEBITDA3.05TransactionvaluetoRevenues0.75TransactionvaluetoMarketEquity1.34日期M&A-GuoboHuang29Chapter10-6ApplicationofthemultiplesgaveanaveragevalueofGulfof$16.1billionThisbenchmarkindicatesthatthe$13.2billionpricewasfairFurtheranalysisisrequired日期M&A-GuoboHuang30Chapter10-7TheSpreadsheetandFormulaMethodologiesAppliedtoChevron,1983Witheightitemsoffinancialinformation,wedevelopafirstestimate日期M&A-GuoboHuang31Chapter10-8ForChevronin1983withoutGulfthevaluedriverswere:Actualtaxrate(T)=42.7%After-taxprofitabilityrate(r)=13.8%Investmentopportunitiesrate(b)=48.0%GrowthrateinEBIT(g)=6.6%Yearsofprospectivesupernormalgrowth(n)=10Marginalcostofcapital(k)=12.0%InitialEBIT(1983)(X0)=$3,106million日期M&A-GuoboHuang32Chapter10-9Theindicated1983valueofChevronwas$16.8billionDeducttotalinterest-bearingdebtof$2billionTheformulamarketvalueofequitywas$14.8billionTheactualmarketvaluewas$12billion日期M&A-GuoboHuang33Chapter10-10SpreadsheetmethodDevelopaspreadsheetforthefuture10yearsDCFthefreecashflowsatacostofcapitalof12%Weobtainedavalueof$7,082millionWeobtainedavalueof$7,123millionusingtheformulamethodThespreadsheetmethodandformulamethodgivethesameresults日期M&A-GuoboHuang34Chapter10-11TheValueofGulf,1983UsetheformulamethodforGulfattheendof1983ThevaluedriversforGulfwere:Actualtaxrate(T)=50%After-taxprofitabilityrate(r)=0.7%Investmentopportunitiesrate(b)=53.2%GrowthrateinEBIT(g)=0.4%Yearsofprospectivesupernormalgrowth=10Marginalcostofcapital(k)=13.0%InitialEBIT(1983)(X0)=$2,990million日期M&A-GuoboHuang35Chapter10-12TheformulavalueforGulfwas$7,395millionItsactualmarketvaluewas$9billionValuingGulfasanogrowthcompanygives$11.5billionValuationbytheformulamethodischeckedbyanalysisoffindingcostsThereturnsfromGulfexplorationanddevelopment(E&D)programswerenegativeBystoppingE&Dprograms,Gulfcouldhaveavoidedlosseswithacapitalizedvalueof$50.36/share日期M&A-GuoboHuang36Chapter10-13Addthepersharevalueofcommonstockof$39togiveatotalof$89ChevronpurchasedGulfreservesatasavingof$5perbarrelbelowitsownfindingcosts;the$5timesthe2,313millionreservesofGulfequals$11.6billionGulfreservesof2,313milliontimesGulf'soperatingprofitof$7.67gives$17.7billionThefourapproachesindicatethatChevron'spurchaseofGulfat$13.2billionwasapositiveNPVinvestment日期M&A-GuoboHuang37Chapter10-14Chevron'sValuein1994Attheendof1994,Chevron'svaluedriverswere:Actualtaxrate(T)=40%After-taxprofitabilityrate(r)=30.0%Investmentopportunitiesrate(b)=40.0%GrowthrateinEBIT(g)=12.0%Yearsofprospectivesupernormalgrowth=10Marginalcostofcapital(k)=10.0%InitialEBIT(1983)(X0)=$3,222million日期M&A-GuoboHuang38Chapter10-15Thesegiveavalueof$38.8billionforChevron.TheactualvalueofChevronattheendof1994was$37.2billion.BenefitstoChevronoftheGulfpurchasein1984Chevroncutitsinvestmentrate(b)from48%to4%forthe1986-1994periodItsprofitabilityrateincreasedfrom13.8%to24%日期M&A-GuoboHuang39Chapter10-16ThevaluedriversusedintheformulamethodShouldnotbetiedtohistoricalpatternsShoulduseforecastsofthefuture日期M&A-GuoboHuang40Chapter10-17MultipleApproachestoValuationCanbeusedascross-checksComparablecompaniesComparabletransactionsSpreadsheetDCFmethodFormulaDCFmethodInvestmentprofitabilityanalysisValuationofreservesinthegroundValuationofcustomerbaseValuationofpotentialsforcostsavings日期M&A-GuoboHuang41Chapter10-18EachmethodshouldbetestedforitsinnerlogicEachmethodcancontributetosomeinsightsonvaluation日期GuoboHuang42ExtraDiscussions

on

Valuation日期GuoboHuang431.DifferencesbetweentheNPVandIRRNPV:pvofcashflowsafterrepayingtheinvestedcapitalandrateofreturn.AcceptNPV>0IRR:rateofreturnequatingthepvsofexpectedcashflowsandcostsofaproject,ie,NPV=0.AcceptIRR>costofcapitalComparison:Forindependentprojects,NPVandIRRgivethesamedecisionFormutuallyexclusiveprojects,sometimesdifferentdecision.Forprojectswithcashoutflows,multipleIRRsbutonlyoneNPV.日期GuoboHuang442.SomebasiccapitalbudgetingrelationshipsEstimatedvalue=P/E*EPSExpectedEPS=salespershare*netprofitmarginP/E=dividendpayoutratio/(k-g)K=rf+beta*(rm–rf)g=retentionrate*ROEROE=(netincome/sales)*(sales/totalassets)*(totalassets/equity)V0=CF0(1+g)/(r-g)EVA=EBIT*(1-corporatetaxrate)–after-tax