The course will provide an introduction to the acquisition of privately held companies along with strategies for value creation in the acquired business. The course, which is exclusively taught using the case method, takes lessons taught in the valuation courses extending these concepts to the valuation of privately held business, the structuring of the acquisition balance sheet and the execution of the acquisition process.
While a discussion of secured financing alternatives will be included, the application of junior capital, both mezzanine debt and equity will be the focus of the course. A risk analysis of the target will be performed and an investment thesis intended to illustrate value creation techniques will be central to each class discussion. Upon completion, students will be better prepared how to assess both operational and financial forms of risk, develop techniques intended to reduce both forms of risk, and consider value creation strategies in marketing, operations, finance and management. Each case will involve a real company acquired over the years by PNC Equity Partner along with actual selling memorandum, diligence prepared by PNC principals, market research firms, accounting firms and law firms employed by PNC as part of their diligence process.
Prerequisites: Financial Management module BFIN 2409 and BFIN 2410 Financial Management 1 & 2, respectively; prior completion of BFIN 2030 Valuation 1 is recommended.