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Home > Mergers and Acquisitions Finance Library > Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions

Mergers and Acquisitions Finance Library

Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions

Joshua Rosenbaum and Joshua Pearl (2009)


Why Read It?

  • This authoritative guide to buyout and M&A valuation is accessible for all levels, from nonprofessional interested in finding out more, to the experienced investment professional needing to update their knowledge.

  • Gives a comprehensive overview of the main skill set needed to be a successful investment banking professional.

  • Offers practical advice on all the main methodologies and valuation procedures for mergers and acquisitions (M&A) and leveraged buyout (LBO) transactions.

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Getting Started

Investment Banking is a practical and topical guide to the analysis of valuation that lies at the heart of investment banking, corporate finance, and private equity. It helps the reader to develop practical judgment skills and a wider perspective of the processes involved. With the approaches and products of investment banking changing all the time, this timely book provides the necessary fundamental technical know-how, with a focus on valuation analysis.

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Authors

Joshua Rosenbaum (b. 1971) is an executive director at UBS Investment Bank in the Global Industrial Group, specializing in structures, M&A, corporate finance, and capital markets transactions. He has previously worked at the International Finance Corporation, the direct investment division of the World Bank. Joshua received an AB from Harvard and an MBA with honors from Harvard Business School.

Joshua Pearl (b. 1971) structures and executes leveraged loan and high-yield bond financings, as well as LBOs and restructurings, for the Leveraged Finance Group at Deutsche Bank. He has previously worked at AG Edwards, and has designed and taught corporate finance training courses. He received a BS in business from the Kelley School of Business.

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Context

  • Gives the banking professional the knowledge and skills to work successfully in transaction-related finance.

  • Combines a practical overview of the fundamentals of LBOs with analysis of an organized M&A sale process.

  • Appraises the basics of valuation and critical due diligence underpinned by a step-by-step approach and the use of diagrams and numerical examples.

  • Explores many of the institutional concepts of investment banking that are not usually covered, and provides definitions of key terms, financial concepts, and processes.

  • Comprehensively codifies the valuation process.

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Impact

  • Focuses on the main valuation methodologies used in the financial markets, such as discounted cash flow, leveraged buy-out analysis, comparable companies, and precedent transactions.

  • Explains how these methodologies can be used effectively to determine a valuation for public and private companies within the context of M&A transactions, LBOs, IPOs, restructurings, and investment decisions.

  • Proposes an innovative structure for issues involving how much you should pay for a business and how to finalize the deal.

  • The structure takes a grounded approach to risk and the range of value drivers available.

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Quotations

In the constantly evolving world of finance, a solid technical foundation is an essential tool for success.

Companies with stable and predictable cash flow, as well as substantial assets, generally represent attractive LBO candidates due to their ability to support larger quantities of debt.

Once the decision to sell has been made, the sell-side advisor seeks to achieve the optimal mix of value maximization, speed of execution, and certainty of completion among other deal-specific considerations for the selling party.

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Further reading

Books:

  • Damodaran, Aswath. Investment Valuation: Tools and Techniques for Determining the Value of Any Asset. 3rd ed. Hoboken, NJ: Wiley, 2012. Revised and updated to reflect market conditions, this authoritative guide to investment valuation offers guidance on how to value virtually any type of asset by the renowned finance expert.
  • Fleuriet, Michel. Investment Banking Explained: An Insider's Guide to the Industry. New York: McGraw-Hill, 2008. This overview of investment banking provides a comprehensive analysis of investment banking approaches and techniques, with each area of specialty being explored in detail.
  • Liaw, K. Thomas. The Business of Investment Banking: A Comprehensive Overview. 3rd ed. Hoboken, NJ: Wiley, 2011. This topical examination of investment banking and valuation offers an accessible guide to the industry and its key operations and methodologies, including new developments that have been adopted by practitioners and the challenges posed by globalization.

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