The IFF School of Corporate Finance

The School of Corporate Finance is unique in the world of corporate finance training. Designed to be a total immersion course that focuses on the complete spectrum of corporate finance transactions. The course is a state-of-the-art guide to modern corporate finance best practice.

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Day 1

Introductory Issues

• What is corporate finance?
• Theory vs practice
• Value drivers
• The central role of risk
• Overview of valuation and pricing methodologies
• Why markets are not perfect, and the implications arising therefrom
• The financial market cycle

Getting to Grips with Free Cash Flow

• Its derivation
• Why it is important
• Role in cash management
• Role in valuation
• Role in transaction structuring

Understanding Financial Structuring

• Operating leverage
• Growth strategies
• Liquidity
• Is there an optimal capital structure?
• Reaction of the financial markets to volatility

Review of General Skills

• Continuous stream discounting
• Lump sum discounting

The Practicalities of Valuation

• Return on capital
• The cost of capital
• Currency issues
• Risk free rates and substitutes if unavailable
• The market premium - traditional approaches
• New world and paradigm theory
• Corporate betas, sectoral betas, when are they a good proxy for cash flow volatility
• When betas are not available or are ‘corrupted’ – what to do
• Investment horizons
• The ongoing period
• Obsolescence and dilution
• Sensitivity analysis to determine the valuation range

Case Study 1: Performing a valuation and sensitivity analysis

Day 2

Demystifying Pricing Techniques

• Determining appropriate comparative businesses
• P/E, EBITDA, EBIT multiples
• Total enterprise value
• Relative growth rates
• Accounting issues in comparative analysis
• Cash multiples
• Total enterprise value
• Comparative ratios
• Non-financial multiples

Getting to Grips with Emerging Markets

• Inverse derivation of the growth rate or the market penetration required
• Issues with risk free rate, market premium and betas
• Availability of substitutes
• When to acknowledge value is speculative

Case Study 2: Determining a business and financing strategy

Project Appraisal Techniques

• Differential cash flows
• Decision-making
• Sensitivity analysis

Adaptive Situations

• Dividend valuation, problems, and when to use it
• The effect of leverage, and whether and when betas should be levered
• ‘Adjusted present value’
• Acquisitions
• The valuation of private companies

Day 3

Understanding Leverage

• The effect of leverage on value – contrasting schools of thought
• The structure and objectives of private equity funds
• The analysis of a business in the context of a leveraged buyout
• The financing structures typical to LBOs
• Coverage requirements of senior financiers
• Adaptations for MBOs – management ratchets
• Platform MBOs
• The range of exit options, the impact on IRR, sensitising the analysis
• Frequently-encountered errors in IRR calculations
• Legal complications
• Modelling LBOs
• Currencies - balance sheet hedging, cash hedging or value hedging – which way to go?

Case Study 3:  Analysing a candidate for an LBO and determining financing structure

Modelling Corporate Cash flows

• Modelling logic
• Modelling risk
• Valuation models, transactions structuring models and equity models
• Corporate cash flow forecasts
• Modelling currencies
• Cost drivers
• Dealing with escalation
• Volatility and sensitivity
• Implementing scenarios
• Carrying out a break-even analysis

Exercises: Various hands-on modelling tasks

Day 4

A Review of Recent Changes

• The European Takeovers Directive – changes from 2006
• IAS 39 – accounting for financial instruments, and the conduct of hedge accounting

The Importance of Shareholder Value

• Evaluation of managerial performance
• The calculations for Economic Value Added
• The analytical approach
• How EVATM aids strategy formation
• Market Value Added

Case Study 4: Implementing an EVATM analysis and identifying strategy that should be adopted

Raising Equity

• Benefits of flotation
• Perspective of equity-raising approaches
• Walk-through of an IPO
• Underwriting, book-building, market stabilisation
• Secondary issues – the different methodologies

Day 5

Mastering Acquisitions

• The European Directive to be enacted by member state by May 2006
• The features that will be common across Europe
• Pricing and valuing the target
• The benefits of a recommendation
• Negotiation ‘timetable’ for an agreed offer
• The advantages of a share-for-share offer
• The pros and cons of an all cash offer
• Purchase of assets or shares
• Tax and accounting considerations
• Earn-outs
• Financial assistance under s.151 (or the equivalent in other OECD jurisdictions)

Contested Bids

• Poison pills and shark repellents
• Planning the strategy and the tactics
• Timetable and Blue Book regulations
• Comparison to other jurisdictions
• Debt financing complications
• Equity financing complications
• Vendor placings
• Concert parties
• Initial shareholdings and share dealing
• Offer structure and price
• Conditions attached to the offer
• Control

Case Study 5:  Planning and implementing a contested acquisition

Five reasons why you MUST attend this course:

1. The residential nature of this programme allows the inclusion of case studies with a deeper level of appreciation and understanding
2. This programme will bridge the gap between theory and market practice, providing recommendations of how the techniques should be applied in different decision-making contexts
3. The course looks at transactions from the viewpoint of the company itself, debt financiers, and shareholders – and highlights the negotiation and commercial issues that arise from the differences in perspective
4. In addition to the comprehensive course materials, each participant leaves the course with a CD-ROM loaded with excel files and additional reading material on a wide range of corporate financing topics
5. It will be tailored specifically to your needs. Intensive coverage and case studies will focus on the industries and sectors that YOU choose