Business Background
Our client is Australia’s leading natural gas producer, committed to providing sustainable energy solutions.
Business Problem
The client was considering a number of potential M&A opportunities and wanted to ensure that members of its corporate development team had the analytical and technical skills necessary to assess the impact of each transaction on the group’s consolidated financial statements and quantify the potential value creation for shareholders.
Solution
We developed a bespoke case study in which the client was the acquirer, and another company was selected as a hypothetical target. We built two M&A models for the course:
• A ‘short form’ version for screening potential deals, in which key financial data was used to analyse the overall impact of the transaction and assess potential value creation for shareholders
• A ‘long form’ version for in-depth analysis, in which we consolidated fully integrated acquirer and target models to analyse the impact of the deal in detail, including an integrated cash flow forecast and analysis from both an equity and credit perspective
The training was a mix of theory and practical ‘hands-on’ modelling work, as participants evaluated the potential acquisition by quantifying and calculating:
• Equity Offer Value and Enterprise Offer Value
• Deal Assumptions and Types of Offer Consideration
• Sources & Uses of Funds, Deal Goodwill and Consolidation Adjustments
• Proforma Group Financials, Ownership, Credit Ratios and Rating Implications
• Proforma EPS accretion/ (dilution)
• Acquisition Return on Invested Capital and Proforma Group Return on Invested Capital
• Present Value of Synergies vs Acquisition Premium Paid
• Scenarios and sensitivity analysis
Business Results
The course improved productivity, analytical and technical skills within the corporate development team. Within a year of completing the training, the client announced a $28bn all-stock merger with a similar-sized oil & gas business. The team was able to directly apply the course material to determine an optimal deal structure for the group’s shareholders.