BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE, PILANI

WORK INTEGRATED LEARNING PROGRAMMES

Digital
Part A: Content Design

Course Title Mergers, Acquisitions and Corporate Restructuring

Course No(s) FIN ZG522
Credit Units 4
Credit Model
Content Authors VITTAL SOMAYAJULA

Course Objectives
No Details

CO1 Gain basic understanding of the underlying concepts and building blocks related
to mergers, acquisitions and corporate restructuring

CO2 Synthesize and apply financial concepts/ tools and techniques learned in previous
finance courses to the area of mergers, acquisitions and corporate restructuring

CO3 Broad understanding of corporate financial strategies, searching targets for

acquisition, due diligence and structuring of transaction including valuation,
post-acquisition synergies and integration, etc.

CO4 Effectively address difficult issues and challenges in mergers and acquisitions,
due diligence, legal, tax and regulatory issues, financing of mergers and
acquisitions, etc.

CO5 Understanding the key essentials and various forms of corporate restructuring
other than M & As

Text Book(s)

T1 Sheeba Kapil and Kanwal Kapil, Mergers and Acquisitions: Valuation, Leveraged
Buyouts and Financing, Wiley India 3rd Edition, 2018

Reference Book(s) & other resources

R1 Patrick A Gaughan, Mergers, Acquisitions and Corporate Restructurings, Wiley

R2 India
Sudi Sudarsanam, Creating Value from Mergers and Acquisitions, FT Prentice Hall.
J. Fred Weston & Samuel Weaver, Mergers & Acquisitions, The McGraw Hill
R3 Education.
 Robert Bruner, Applied Mergers and Acquisitions, Wiley Finance.
R4 Enrique Arzac, Valuation for Acquisitions, Buyouts and Restructurings, Wiley
Finance.
R5

Content Structure

1.Understanding M & As: Types of Mergers, History of Mergers, Merger Motives

2.M & A: Takeover Defenses (Pre- and Post-Takeover)

3.Identifying Opportunities in M & A: Buy-side and sell-side (Form of acquisition-stock or

asset, mode of payment-securities or cash, EPS Bootstrapping/Accretion, HHI Index (Anti-
Trust Issues), Valuing Synergies and structuring Swap Ratio

4.Concepts in Business Valuation: DCF Model, Free cash flow estimation, discount rate, two
stage and multi-stage model, beta, etc.

5.Business Valuation and Consideration paid in M & A: Relative Valuation methods-

comparable company analysis, comparable transactions analysis, takeover premium, etc. Post-
merger value, gains to acquirer and target

6.Valuing Intangibles: Brand and Goodwill, etc.

7.Due Diligence: Legal, Tax and Regulatory Issues, etc.

8.Accounting for Mergers and Acquisitions

9.Financing M & A: equity vs debt financing

10.Leveraged Buyouts: structuring and valuation

11.Corporate Restructurings
a) Portfolio Restructuring: Divestures, Equity carveouts, spin-offs, Joint Ventures &
Strategic Alliances, etc.
b) Financial Restructuring: Financial Distress, Corporate Insolvency, Equity vs Debt
Restructuring, Introduction to Insolvency and Bankruptcy Code of India
Learning Outcomes:
No Learning Outcomes

LO1 To understand how a target company is valued? How does the method of
valuation affect the availability of funds from banks, institutional investors and
private equity investors?

LO2 To assess the potential gains from an acquisition? How dependable are these
projections, from an investor's viewpoint?

LO3 To understand the key essentials of due diligence

LO4 To know how such transactions are arranged and financed

LO5 To learn how a company, divest and alternative ways of divesting a business

LO6 To understand the essential features of leveraged buyouts, valuation and

arrangement of financing for such transactions

LO7 To examine the post-merger integration, planning, organizing and executing

LO8 To learn different forms of corporate restructuring

LO9 To understand corporate financial strategies for spurring growth in business

L10 To know the legal, tax and regulatory aspects of such transactions

Experiential Learning Components:

1. This course will feature experiential learning components in the form of projects and
assignments (such as case studies, financial modeling, simulation, etc.) that are designed to
enable the participants to learn by doing. This will also form part of the Evaluation
Components for the course.
2. Please note that experiential learning components are integrated into the following
modules:

Module Topic Experiential Learning Component

EPS Bootstrapping/
Module 3 Excel based analysis
Exchange Ratio
Module 4 DCF Model Excel based analysis
Relative Valuation
Module 5 Excel based analysis
Model
Valuation of
Module 6 Excel based analysis
Intangibles
Module 10 LBO Modelling Excel based analysis
Financial
Module 11. b Excel based analysis
Restructuring
M & A Project –
Overall details will be shared Student Assignment– 15 marks
in due course
 Harvard Simulation
Finance Simulation: M&A
in Wine Country V2 by
Overall Online
Timothy A. Luehrman, W.
Carl Kester

3. We will be building financial models and doing simulation using Microsoft Excel,
hence students will need a laptop/ PC preloaded with Microsoft Excel 2010 (or later) for
facilitating experiential learning.

4. For doing financial calculations it is recommended that students purchase/ obtain a

financial calculator. We recommend the Texas Instruments BA II plus calculator because it is
very intuitive/ easy to operate and also because it is economical to purchase. This calculator
comes in two versions, basic and professional. The basic version is sufficient for our course
work and indeed even for professional exams such as CFA/ FRM. If you do not wish to
purchase a financial calculator then you may fall back on any basic/ standard/ scientific
calculator. If you do buy the financial calculator make sure you become familiar with its
operation and practice throughout the course and not just before the exam.

Part B: Learning Plan

Academic Term First Semester, 2019-2020

Course Title Mergers, Acquisitions and Corporate Restructuring
Course No FIN ZG522
Lead Instructor VITTAL SOMAYAJULA

Contact Hours 1 and 2

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 1 Review Course Handout/ List

your expectations from this course

During 1 Understanding M & As: Types of Chapter 1 of text (T1)

CH Mergers, History of Mergers,
Merger Motives

Post 1 Review reference chapters from Chapter 1 of text (T1)

CH textbook; do the assigned
homework/ experiential learning
activities

Contact Hours 3 and 4

Type Content Topic Title Study/HW Resource
Ref. Reference
Pre CH 2 Review previous week's topics Notes/ Slides

During 2 M & A: Takeover Defenses (Pre- Chapter 3 of text (T1)

CH and Post-Takeover)

Post CH 2 Review reference chapters from Chapter 3 of text (T1)

textbook; do the assigned
homework/ experiential learning
activities

Contact Hour 5 and 6

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 3 Review previous week's topics Notes/ Slides

During 3 Identifying Opportunities in M & A: Chapter 4 of text (T1)

CH Buy-side and sell-side (Form of
acquisition-stock or asset, mode of
payment-securities or cash, EPS
Bootstrapping/Accretion, HHI Index
(Anti-Trust Issues), Valuing
Synergies and structuring Swap
Ratio

Post 3 Review reference chapters from Chapter 4 of text (T1)

CH textbook; do the assigned
homework/ experiential learning
activities

Contact Hour 7 and 8

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 4 Review previous week's topics Notes/ Slides

During 4 Concepts in Business Valuation: Chapter 10 of text

CH DCF Model, Free cash flow (T1)
estimation, discount rate, two stage
and multi-stage model, beta, etc.-
contd.

Post 4 Review reference chapters from Chapter 10 of text

CH textbook; do the assigned (T1)
 homework/ experiential learning
activities

Contact Hours 9 and 10

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 4 Review previous week's topics Notes/ Slides

During 4 Concepts in Business Valuation: DCF Chapter 10 of text

CH Model, Free cash flow estimation, discount (T1)
rate, two stage and multi-stage model, beta,
etc.

Post 4 Review reference chapters from Chapter 10 of text

CH textbook; do the assigned (T1)
homework/ experiential learning
activities

Contact Hours 11 and 12

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 5 Review previous week's topics Notes/ Slides

During 5 Business Valuation and Chapter 11 of text (T1)

CH Consideration paid in M & A:
Relative Valuation methods-
comparable company analysis,
comparable transactions
analysis, takeover premium, etc.
Post-merger value, gains to
acquirer and target-contd.

Post CH 5 Review reference chapters from Chapter 11 of text (T1)

textbook; do the assigned
homework/ experiential
learning activities

Contact Hours 13 and 14

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 5 Review previous week's topics Notes/ Slides

During 5 Business Valuation and Consideration Chapter 11 of text (T1)
CH paid in M & A: Relative Valuation
methods-comparable company analysis,
comparable transactions analysis,
takeover premium, etc. Post-merger
value, gains to acquirer and target

Post 5 Review reference chapters from Chapter 11 of text (T1)

CH textbook; do the assigned
homework/ experiential
learning activities

Contact Hours 15
Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH Review previous week's Notes/ Slides

topics

During Case Study Mercury Athletic: Valuing

CH the
Opportunity (HBP Brief
case)
Luehrman &
Heilprin
Product No.4050 (2009) 14p

Contact Hours 16 and 17

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 6 Review previous week's Notes/ Slides

topics

During 6 Valuing Intangibles: Brand and Chapter 12 of text (T1)

CH Goodwill, etc.

Post 6 Review reference chapters Chapter 12 of text (T1)

CH from textbook; do the
assigned homework/
experiential learning
activities
 Contact Hours 18 and 19
Type Content Topic Title Study/HW Resource Reference
Ref.

Pre CH 7 Review previous week's Notes/ Slides

topics

During 7 Due Diligence: Legal, Tax Chapter 6 of text (T1)

CH and Regulatory Issues, etc.

Post CH 7 Review reference chapters Chapter 6 of text (T1)

from textbook; do the
assigned homework/
experiential learning
activities

Contact Hour 20 and 21

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 8 Review previous week's Notes/ Slides

topics

During 8 Accounting for Mergers and Chapter 8 of text (T1)

CH Acquisitions

Post 8 Review reference chapters Chapter 8 of text (T1)

CH from textbook; do the
assigned homework/
experiential learning
activities

Contact Hour 22 and 23

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 9 Review previous week's Notes/ Slides

topics

During 9 Financing M & A: equity vs debt Chapter 15 of text (T1)

CH financing

Post 9 Review reference chapters Chapter 15 of text (T1)

CH from textbook; do the
 assigned homework/
experiential learning
activities

Contact Hour 24 and 25

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 10 Review previous week's Notes/ Slides

topics

During 10 Leveraged Buyouts: structuring Chapter 14 & 16 of text (T1)

CH and valuation

Post 10 Review reference chapters Chapter 14 & 16 of text (T1)

CH from textbook; do the
assigned homework/
experiential learning
activities

Contact Hours 26 and 27

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 11.a Review previous week's Notes/ Slides

topics

During 11.a Portfolio Restructuring: Chapter 2 of text (T1)

CH Divestures, Equity
carveouts, spin-offs, Joint
Ventures & Strategic
Alliances, etc.

Post CH 11.a Review reference chapters Chapter 2 of text (T1)

from textbook; do the
assigned homework/
experiential learning
activities

Contact Hours 28 and 29

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH 11.b Review previous week's Notes/ Slides

topics
During 11.b Financial Restructuring: Financial Notes/ Slides
CH Distress, Corporate Insolvency,
Equity vs Debt Restructuring,
Introduction to Insolvency and
Bankruptcy Code of India

Post 11.b Do the assigned Notes/ Slides

CH homework/ experiential
learning activities

Contact Hours 30
Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH Review previous week's Notes/ Slides

topics

During Case Study (HBSP) Debt Restructuring: Bankruptcy

CH Chrysler’s Sale to Fiat Foley,
Goldberg, &
Meyer
210022 2010 25p

Contact Hours 31 and 32

Type Content Topic Title Study/HW Resource
Ref. Reference

Pre CH Review previous week's Notes/ Slides

topics.

During Simulation Exercise (HBSP) M&A in Wine Country V2 by

CH Timothy A. Luehrman, W. Carl
Kester

Evaluation Scheme:
Legend: EC = Evaluation Component; AN = After Noon Session; FN = Fore Noon Session
No Name Type Duration Weight Day, Date, Session, Time
EC-1 Quiz-I Online - 5% August 23 – September 01, 2019
Quiz-II 5% September 27 – October 6, 2019
Experiential 15% November 01 – 10, 2019
Learning
Assignments
EC-2 Mid-Semester Test Closed 2 hours 30% Sunday, 22/09/2019 (AN)
Book 2 PM – 4 PM
EC-3 Comprehensive Open 3 hours 45% Sunday, 17/11/2019 (AN)
Exam Book 2 PM – 5 PM

Notes:
Syllabus for Mid-Semester Test (Closed Book): Topics in Session Nos.1 to 16 (contact
hours)
Syllabus for Comprehensive Exam (Open Book): All topics (Session Nos. 1 to 32)
(contact hours)

Important links and information:

Elearn portal: https://elearn.bits-pilani.ac.in
Students are expected to visit the Elearn portal on a regular basis and stay up to date with the
latest announcements and deadlines.
Contact sessions: Students should attend the online lectures as per the schedule provided on
the Elearn portal.
Evaluation Guidelines:
1. EC-1 consists of either two Assignments or three Quizzes or two Quizzes and one
Assignment. Students will attempt them through the course pages on the Elearn
portal. Announcements will be made on the portal, in a timely manner.
2. For Closed Book tests: No books or reference material of any kind will be
permitted.
3. For Open Book exams: Use of books and any printed / written reference material
(filed or bound) is permitted. However, loose sheets of paper will not be allowed.
Use of calculators is permitted in all exams. Laptops/Mobiles of any kind are not
allowed. Exchange of any material is not allowed.
4. If a student is unable to appear for the Regular Test/Exam due to genuine exigencies,
the student should follow the procedure to apply for the Make-Up Test/Exam which
will be made available on the Elearn portal. The Make-Up Test/Exam will be
conducted only at selected exam centres on the dates to be announced later.

It shall be the responsibility of the individual student to be regular in maintaining the self-
study schedule as given in the course handout, attend the online lectures, and take all the
prescribed evaluation components such as Assignment/Quiz, Mid-Semester Test and
Comprehensive Exam according to the evaluation scheme provided in the handout.