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| Business Valuation In Emerging Economy - The Why, How And How Not To. |
COURSE OBJECTIVE
The question of valuation normally comes when there is a talk about some purchase or sale transactions. When a company sells a brand, it needs to be valued for negotiation. When an entire division (or so called SBU) is put on sale, factors affecting valuation of the division would be products manufactured, location, asset quality and life, revenue, cash flows etc. Finally when the entire company is sold, factors influencing brand valuation as well as unit(s) valuation would be considered to arrive at the value of the entire business. The business valuation is a highly subjective area and it largely depends on value perception and judgment. Valuation also depends on the interests of the person undertaking the valuation. A seller would try to maximize the value of his or her business and the buyer would try to find faults with seller’s valuation and put a lower value.
The term “value” has a number of distinct meanings. However, in the context of business valuation, two most general definitions of value are: Value in Use and Value in Exchange. Value in use implies fair market value of a business, while value in exchange denotes the liquidation value of the same firm. Liquidation has as its basic purpose sale of assets to meet certain liabilities rather than continuation of business.
The primary objective of this module is to expose participants to various models of business valuation. The module will discuss valuation of listed and unlisted companies. Emphasis will be given to valuation of firms in emerging economies. |
TEACHING METHODOLOGY
The programme will be delivered partly by lecture, but mainly using an interactive seminar approach to draw on delegates’ own experience. There will be practical exercises, culminating in the production by individuals of an action plan for their own organisations.
Who can attend?
Consultants, equity analysts, private equity fund managers, and investment bankers would find the module useful. The module will also benefit academics who teach courses like, corporate finance, business valuation, mergers and acquisition etc.
Key benefits:
For Investment banker/Private Equity/Consultants
1. Learn to do Business valuation for companies in emerging market
2. Work on case study/exercises on actual Indian companies
3. Strengthen your already acquired knowledge with theoretical finesse
4. Get confidence in assumptions made during Valuation process on
Terminal Value, Future cash flows, WACC, etc
5. Opportunity for 1 hour consulting session
6. Opportunity to clear doubts via email free of cost till Jan 2010
"Tighten the nut and bolt of existing understanding and assumptions during Valuation process"
Professor Ashok Banerjee
Professor (Finance & Control), Indian Institute of Management Calcutta, since August, 2004. He has vast exprience in his professional career Professor (Finance & Accounting) Indian Institute of Management, Lucknow , 23 May,2003-30 July, 2004
Associate Professor (Accounting & Finance), Indian Institute of Management, Lucknow (1 June 2000-22 May 2003)
Professor (Finance) Institute of Management Technology, Ghaziabad (November 1999-May 2000)
Associate Professor (Finance) Institute of Management Technology, Ghaziabad (November 1995-October,1999)
Assistant Director, Board of Studies, Institute of Chartered Accountants of India (July 1993-October 1995).
Lecturer in Accountancy in Durgapur Government College under West Bengal Education Service (February 1990-July 1993).
VISITING ASSIGEMENT:
Visiting Associate Professor, Asian Institute of Technology, Bangkok January,2002 term. Taught a course on “Mergers & Acquisitions”.
Day 1
Session 1
Scope:
This session will provide an overview of various valuation models. A comparison between discounted cash flow model and market multiples will be drawn. The sum-of-parts method of valuation will be discussed in the context of valuation of a diversified business. Each participant will get to work on a simulated valuation exercise. Implementation issues in valuation will be highlighted.
Take aways:
The participants attending the session will learn the following:
- Various valuation models (e.g., DCF, Relative Valuation, Sum-of-parts method etc.)
- Estimation of cost of capital in emerging economies
- Valuation of diversified firms
Session-2 Valuation of LBO deals
Scope:
This session will showcase valuation of highly levered deals. Highly levered transactions use the balance sheet of the target to finance the acquisition. A major challenge is to value such deals with high leverage. The adjusted present value (APV) technique is often used to value such transactions. APV method separately values investment and financing decisions. A simulated exercise will be used to explain the APV method.
Take aways:
The participants attending the session will learn the following:
- APV method of valuation
- Understand why traditional NPV fails
- Understand how to estimate the value of financial side effects
Day 2
Session-3 Valuing Deal Structures in M&A
Scope:
Market risk refers to the risk that the share price of the acquirer company may fall after the announcement of a merger. The real challenge for the investment bankers is to decide as to how to price stock-swap mergers and how to allocate market risk between the acquirer and the target shareholders. Such market risk arises during two time periods: the period between the date of announcement and the date of consummation of the deal (pre-closing period); and the period after the consummation of the deal till a finite protection period (post-closing period). Investment banks help acquiring firms to structure M&A deals to take care of market risks and hence to make the deal more acceptable to the target shareholders. This session will discuss valuation of various options used in deal structuring.
Take aways:
The participants attending the session will learn the following:
- Sources of risks in M&A
- Valuation of Collar, Earn out agreements, and Contingent value rights (CVRs)
- Circumstances in which these structures may be used
Session-4 Comprehensive valuation Exercise
Scope:
The final session will discuss a case study which has sufficient ingredients to implement various valuation techniques. Analysis of the case will demonstrate that a firm’s valuation depends on the method used. The case will also show how to estimate the growth rates in DCF model. The case is based on a divestiture in India.
Take aways:
The participants attending the session will learn the following:
- How to value a real life diversified company
- Use of various valuation models
- How to estimate growth rates in a case of product with varying regional demand.
Register
Download information brochure
Date: Nov 27-28 Mumbai
Venue: Hotel Ramada Plaza Palm Grove, Juhu Beach, Mumbai - 400049
Your Investment:
Early-Bird Special (Get huge discount on the fee by Registering before Nov 20, 2009)
Standard Fee (per participant)
| Category |
Before Nov 20,
2009 |
After Nov 20,
2009 |
| Corporates/Working
Professional |
Rs 13,600 |
Rs 21,000 |
| Academician |
Rs 9,800 |
Rs 15,000 |
| Students |
Rs 6,800 |
Rs 12,000 |
* Avail 10% discount for every extra participant from the same institution
** Register before Nov 5 and get an exclusive 20% discount coupon for our next program
Pls contact Training Manager for more details. Ph - +91 99005 51887
The registration fee for the event covers the following:
Attendance, copy of the documentation, lunches and light refreshments. Accommodation is not included. Detailed delegate information will be sent to you approximately two weeks before the event.
Payment is required in advance of the event. Payment may be made by par cheque or demand draft drawn in
favour of “OptiRisk Learning Systems (P) Ltd” payable at Gurgaon.
WHAT HAPPENS IF I HAVE TO CANCEL?
Confirm your CANCELLATION in writing up to 15 working days before the event and receive a refund less a 10% service charge. Regrettably, no refunds can be made for cancellations received less than 15 working days prior to the event. However, SUBSTITUTIONS are welcome at any time.
The organisers reserve the right to amend the programme if necessary. INDEMNITY: Should for any reason outside the control of OptiRisk Learning Systems (P) ltd (hereafter called OptiRisk), the venue or the speakers change, or the event be cancelled due to industrial action, adverse weather conditions, or an act of terrorism, OptiRisk will endeavour to reschedule, but the client hereby indemnifies and holds OptiRisk harmless from and against any and all costs, damages and expenses, including attorneys fees, which are incurred by the client. The construction validity and performance of this Agreement shall be governed by all aspects by the laws of India to the exclusive jurisdiction of whose court the Parties hereby agree to submit.
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