Details

Private Capital Markets


Private Capital Markets

Valuation, Capitalization, and Transfer of Private Business Interests
2. Aufl.

von: Robert T. Slee

80,99 €

Verlag: Wiley
Format: PDF
Veröffentl.: 12.04.2011
ISBN/EAN: 9781118075425
Sprache: englisch
Anzahl Seiten: 640

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Beschreibungen

<p><b>Praise for Private Capital Markets</b> <p><b><i>Valuation, Capitalization, and Transfer of Private Business Interests</i></b> <p><b>SECOND EDITION</b> <p>"In the years since publication of the first edition of <i>Private Capital Markets,</i> the concepts and ideas that it presents have been widely accepted by progressive members of the business valuation community. Now with the <i>Second Edition</i>, author Rob Slee has included empirical data on capital markets for midsized businesses. This book remains a must for everyone involved in appraising, buying, selling, or financing privately owned businesses."<br> <b>—Raymond C. Miles, founder, The Institute of Business Appraisers</b> <p>"The Graziadio School of Business has used the <i>Private Capital Markets</i> book for several years with great success. This course, along with the Pepperdine Private Capital Markets Survey project, has helped our students better prepare for careers in middle market companies."<br> <b>—Linda Livingstone, Dean of the Graziadio School of Business and Management, Pepperdine University</b> <p>"Our international association of independent M&A professionals recommends this text as the most comprehensive foundation for understanding the private capital marketplace. This book is essential reading for middle market M&A advisors, investors, and other decision-makers in the private capital markets."<br> <b>—Mike Nall, founder, Alliance of M&A Advisors</b> <p><b>A practical road map for making sound investment and financing decisions based on real experiences and market needs</b> <p>Now fully revised and in a second edition, <i>Private Capital Markets</i> provides lawyers, accountants, bankers, estate planners, intermediaries, and other professionals with a workable framework for making sound investment and financing decisions based on their own needs and experiences. <p>This landmark resource covers: <ul> <li>Private business valuation</li> <li>Middle market capital sources</li> <li>The business ownership transfer spectrum</li> <li>And much more</li> </ul> <p><i>Private Capital Markets, Second Edition</i> surveys the private capital markets and presents the proven guidance you need to navigate through these uncharted waters.
<p>Foreword xv</p> <p>Preface xix</p> <p>Acknowledgments xxiii</p> <p><b>CHAPTER 1 Capital Markets 1</b></p> <p>Market Structure 2</p> <p>Information 2</p> <p>Why Are Markets Segmented? 8</p> <p><b>CHAPTER 2 Middle-Market Finance 17</b></p> <p>Middle-Market Finance Theory 18</p> <p>Triadic Logic 19</p> <p>Middle-Market Finance Theory in Practice 19</p> <p>Owner Motives 27</p> <p>Authority 28</p> <p>Triangulation 29</p> <p><b>PART ONE Business Valuation</b></p> <p><b>CHAPTER 3 Private Business Valuation: Introduction 35</b></p> <p>Private Investor Expectations Drive Private Valuation 36</p> <p>Private Business Valuation Can Be Viewed through Value Worlds 39</p> <p>Valuation as a Range Concept 51</p> <p>Triangulation 54</p> <p><b>CHAPTER 4 Market Value 57</b></p> <p>Levels of Private Ownership 61</p> <p>Triangulation 67</p> <p><b>CHAPTER 5 Asset Subworld of Market Value 69</b></p> <p>Steps to Derive Net Asset Value 73</p> <p>Triangulation 73</p> <p><b>CHAPTER 6 Financial Subworld of Market Value 75</b></p> <p>Specific Investor Return 82</p> <p>Specific Industry Return 84</p> <p>General Investor Returns 87</p> <p>Triangulation 90</p> <p><b>CHAPTER 7 Synergy Subworld of Market Value 93</b></p> <p>Synergies 97</p> <p>Capitalization of Benefit Streams 104</p> <p>Discounting of Benefit Streams 104</p> <p>Seller/Buyer Market Valuation 105</p> <p>Nonenterprise Market Valuations 108</p> <p>Triangulation 108</p> <p><b>CHAPTER 8 Fair Market Value 111</b></p> <p>Appraisal Organizations 113</p> <p>Business Appraisal Standards 114</p> <p>Fair Market Value Process 115</p> <p>Key Steps to Derive Fair Market Value 125</p> <p>Does the Fair Market Value Process Make Sense? 126</p> <p>Tearing Down the Buildup Models 129</p> <p>Triangulation 130</p> <p><b>CHAPTER 9 Fair Value 133</b></p> <p>Dissenting and Oppressed Shareholders 133</p> <p>Triggering Events 134</p> <p>Determination of Fair Value 137</p> <p>Triangulation 140</p> <p><b>CHAPTER 10 Incremental Business Value 143</b></p> <p>Nature of Incremental Business Value 144</p> <p>Problems with Using Traditional Methods 146</p> <p>Value-Based Approaches 146</p> <p>Net Present Value 146</p> <p>Incremental Business Value 148</p> <p>Private Cost of Capital Model 151</p> <p>Ramifications of Using PCOC 155</p> <p>Investment 156</p> <p>Project Decision Making 158</p> <p>Problems with Incremental Business Value 158</p> <p>Value-Creation Strategies 158</p> <p>Increase Recast EBITDA 159</p> <p>Reduce Risk 160</p> <p>Employ High-Yielding Capital 160</p> <p>Incremental Business Value versus Market Value 161</p> <p>Triangulation 162</p> <p><b>CHAPTER 11 Insurable Value 165</b></p> <p>Risk and Insurance 165</p> <p>Buy/Sell Agreements 167</p> <p>Valuation Mechanics 168</p> <p>Triggering Events 170</p> <p>Key Person Insurance 172</p> <p>Business Interruption 174</p> <p>Triangulation 177</p> <p><b>CHAPTER 12 FASB Value Worlds 179</b></p> <p>FASB Fair Value (ASC 820, Formerly FAS 157) 179</p> <p>Business Combinations (ASC 805, Formerly FAS 141R) 184</p> <p>Impaired Goodwill (ASC 350-20) 186</p> <p>Valuation 189</p> <p>Triangulation 192</p> <p><b>CHAPTER 13 Intangible Asset Value 195</b></p> <p>Subworlds 197</p> <p>Intellectual Property 201</p> <p>Intellectual Capital 204</p> <p>Triangulation 206</p> <p><b>CHAPTER 14 Other Value Worlds 209</b></p> <p>Investment Value World 209</p> <p>Owner Value World 210</p> <p>Collateral Value World 212</p> <p>Early Equity Value World 215</p> <p>Bankruptcy Value World 216</p> <p>Public Value World 217</p> <p>Triangulation 219</p> <p><b>CHAPTER 15 Private Business Valuation: Conclusion 223</b></p> <p>Private Investor Return Expectations 223</p> <p>Value Worlds 225</p> <p>Private Business Valuation Is a Range Concept 230</p> <p>Triangulation 231</p> <p>Final Thoughts on Valuation 232</p> <p><b>PART TWO Capital Structure</b></p> <p><b>CHAPTER 16 Capital Structure: Introduction 235</b></p> <p>Public Capital Markets 235</p> <p>Private Capital Markets 240</p> <p>Pepperdine Private Capital Market Line 244</p> <p>Key Issues Regarding the Pepperdine Private Capital Market Line 249</p> <p>Capital Structure Treatment 250</p> <p>Triangulation 252</p> <p><b>CHAPTER 17 Bank Lending 255</b></p> <p>Types of Facilities 255</p> <p>Interest Rates 259</p> <p>Interest Rate Hedges 262</p> <p>Loan Covenants 265</p> <p>How Banks Deal with Covenant Violations 266</p> <p>Loan Costs 266</p> <p>Risk Ratings 270</p> <p>Negotiating Points 270</p> <p>Triangulation 274</p> <p><b>CHAPTER 18 Government Lending Programs 275</b></p> <p>Industrial Revenue Bonds 276</p> <p>Business and Industry Loan Program 279</p> <p>Small Business Administration Programs 281</p> <p>7(a) Loan Guaranty Program 282</p> <p>Certified Development Company 504 Loan Program 286</p> <p>CAPLines Loan Program 289</p> <p>Export Working Capital Program 291</p> <p>Negotiating Points 294</p> <p>Triangulation 294</p> <p><b>CHAPTER 19 Equipment Leasing 297</b></p> <p>Types of Leases 297</p> <p>Lease Rate Factors 301</p> <p>Lessor Types 302</p> <p>Comparison of Leasing and Purchasing 306</p> <p>Negotiating Points 310</p> <p>Triangulation 312</p> <p><b>CHAPTER 20 Asset-Based Lending 315</b></p> <p>How Asset-Based Lending Works 315</p> <p>Asset-Based Lenders 320</p> <p>Tier 1 Asset-Based Lenders 322</p> <p>Tier 2 Asset-Based Lenders 325</p> <p>Tier 3 Asset-Based Lenders 328</p> <p>Negotiating Points 331</p> <p>Triangulation 333</p> <p><b>CHAPTER 21 Factoring 335</b></p> <p>How Factoring Works 335</p> <p>Mechanics of Factoring 337</p> <p>Fees and Terms 338</p> <p>Negotiating Points 343</p> <p>Triangulation 345</p> <p><b>CHAPTER 22 Mezzanine Capital 347</b></p> <p>Loan Structure 347</p> <p>Mezzanine Investors 351</p> <p>Targeted Investments 353</p> <p>Pricing 354</p> <p>Debt Mezzanine Capital 354</p> <p>Equity Mezzanine Capital 356</p> <p>Other Deal Terms 358</p> <p>Negotiating Points 360</p> <p>Triangulation 363</p> <p><b>CHAPTER 23 Owners, Angels, and Venture Capitalists 365</b></p> <p>Stages of Private Equity Investor Involvement 366</p> <p>Private Placements 368</p> <p>Financial Barn Raisings 368</p> <p>Within Existing Business Relationships 369</p> <p>Why Private Placements Fail 369</p> <p>Pre- and Postmoney Valuation 379</p> <p>Negotiating Points 380</p> <p>Triangulation 383</p> <p><b>CHAPTER 24 Private Equity 385</b></p> <p>Stages of Private Equity Investor Involvement 386</p> <p>Hedge Funds 392</p> <p>Family Offices 394</p> <p>Term Sheet 396</p> <p>Negotiating Points 397</p> <p>Triangulation 399</p> <p><b>CHAPTER 25 Capital Structure: Conclusion 401</b></p> <p>Capital Providers Manage Risk and Return in Their Portfolios 401</p> <p>The Pepperdine Private Capital Market Line Comprises Expected Returns 402</p> <p>Private Cost of Capital Emanates from the Private Capital Markets 404</p> <p>High Cost of Capital Limits Private Company Value Creation 405</p> <p>Intermediation Is Relatively Ineffective in the Middle Market 406</p> <p>Triangulation 407</p> <p><b>PART THREE Business Transfer</b></p> <p><b>CHAPTER 26 Business Transfer: Introduction 411</b></p> <p>Public Manager and Owner Motives 411</p> <p>Private Business Ownership Transfer Spectrum 413</p> <p>Employee Transfer Channel 415</p> <p>Charitable Trusts Transfer Channel 416</p> <p>Family Transfer Channel 417</p> <p>Co-Owner Transfer Channel 418</p> <p>Outside, Retire, Transfer Channel 418</p> <p>Outside, Continue, Transfer Channel 419</p> <p>Going Public, Going Private Transfer Channel 419</p> <p>Exit Planning 420</p> <p>Triangulation 421</p> <p><b>CHAPTER 27 Employee Stock Ownership Plans 423</b></p> <p>Overview 424</p> <p>Leveraged ESOPs 429</p> <p>ESOPs in S Corporations 431</p> <p>Setting Up an ESOP 431</p> <p>Points to Consider 436</p> <p>Bottom Line on ESOPs 438</p> <p>Triangulation 438</p> <p><b>CHAPTER 28 Management Transfers 441</b></p> <p>Differences between Management Buyouts and Management Buy-Ins 443</p> <p>Likely Deal Structures 444</p> <p>Deals 447</p> <p>Points to Consider 456</p> <p>Triangulation 459</p> <p><b>CHAPTER 29 Charitable Trusts 461</b></p> <p>Structure of Charitable Trusts 461</p> <p>Charitable Remainder Trusts 461</p> <p>Points to Consider for CRTs 466</p> <p>Charitable Lead Trusts 468</p> <p>Points to Consider for CLTs 471</p> <p>Comparison of CRTs and CLTs 473</p> <p>Triangulation 473</p> <p><b>CHAPTER 30 Family Transfers 475</b></p> <p>Stock Gifts 476</p> <p>Private Annuities 480</p> <p>Self-Canceling Installment Notes 482</p> <p>Grantor-Retained Annuity Trusts 483</p> <p>Family Limited Partnerships 487</p> <p>Intentionally Defective Grantor Trusts 489</p> <p>Comparison of Family Transfer Methods 492</p> <p>Role of Insurance in Family Transfers 493</p> <p>Triangulation 493</p> <p><b>CHAPTER 31 Co-Owner Transfers 495</b></p> <p>Buy/Sell Agreements 495</p> <p>Buy/Sell Types 497</p> <p>Triggering Events 499</p> <p>Funding Techniques 501</p> <p>Ways to Handle Deadlocks 502</p> <p>When No Buy/Sell Agreement Exists 502</p> <p>Triangulation 503</p> <p><b>CHAPTER 32 Outside Transfers: Retire 505</b></p> <p>Preparation for a Transfer 506</p> <p>Transfer Players 507</p> <p>Marketing Processes 508</p> <p>Negotiated Transfers 509</p> <p>Private Auctions 512</p> <p>Two-Step Private Auctions 517</p> <p>Closing the Deal 519</p> <p>After the Transfer 521</p> <p>Triangulation 521</p> <p><b>CHAPTER 33 Outside Transfers: Continue 523</b></p> <p>Consolidations 523</p> <p>Roll-Ups 526</p> <p>Buy and Build or Recapitalizations 528</p> <p>Recapitalization Points to Consider 533</p> <p>Triangulation 533</p> <p><b>CHAPTER 34 Going Public, Going Private 535</b></p> <p>Direct Public Offerings 536</p> <p>Which Companies Are Public? 538</p> <p>Initial Public Offering Team 539</p> <p>IPO Process 541</p> <p>Advantages of Going Public 544</p> <p>Disadvantages of Going Public 544</p> <p>Going Public Key Points to Consider 545</p> <p>Going Public on Foreign Exchanges 546</p> <p>Reverse Mergers 547</p> <p>Going Private 548</p> <p>Going Private Key Points to Consider 549</p> <p>Triangulation 551</p> <p><b>CHAPTER 35 Business Transfer: Conclusion 553</b></p> <p>Segmented Transfer Activity and Arbitrage 553</p> <p>Owner Motives Choose the Range of Values 556</p> <p>Creating Value in a Private Business Requires Planning 560</p> <p>Triangulation 566</p> <p><b>CHAPTER 36 Conclusion 569</b></p> <p>Theme 1 569</p> <p>Theme 2 570</p> <p>Theme 3 571</p> <p>Theme 4 571</p> <p>Theme 5 572</p> <p>Private Capital Markets 573</p> <p>What We Do Not Know 575</p> <p>A Final Thought 578</p> <p><b>APPENDIX A Corporate Finance Theory: Application to Private Capital Markets 579</b></p> <p><b>APPENDIX B Principle of Substitution www.wiley.com/go/privatecapital</b></p> <p><b>APPENDIX C IBA Standards: Business Appraisal Standards www.wiley.com/go/privatecapital</b></p> <p><b>APPENDIX D Private Equity Securities www.wiley.com/go/privatecapital</b></p> <p><b>APPENDIX E Sample Preferred Stock Offering Term Sheet www.wiley.com/go/privatecapital</b></p> <p><b>APPENDIX F Private Placements www.wiley.com/go/privatecapital</b></p> <p><b>APPENDIX G Sample Management Buyout Letter of Intent www.wiley.com/go/privatecapital</b></p> <p>About the Web Site  597</p> <p>Index  599</p>
<p><b>ROBERT T. SLEE, CBA, CM&AA,</b> is President of Robertson & Foley, an investment banking firm that provides valuation, capital raising, and transfer advisory services to middle market companies. He speaks extensively on value creation for private businesses.
<p><b>Praise for Private Capital Markets</b> <p><b><i>Valuation, Capitalization, and Transfer of Private Business Interests</i></b> <p><b>SECOND EDITION</b> <p>"In the years since publication of the first edition of <i>Private Capital Markets,</i> the concepts and ideas that it presents have been widely accepted by progressive members of the business valuation community. Now with the <i>Second Edition</i>, author Rob Slee has included empirical data on capital markets for midsized businesses. This book remains a must for everyone involved in appraising, buying, selling, or financing privately owned businesses."<br> <b>—Raymond C. Miles, founder, The Institute of Business Appraisers</b> <p>"The Graziadio School of Business has used the <i>Private Capital Markets</i> book for several years with great success. This course, along with the Pepperdine Private Capital Markets Survey project, has helped our students better prepare for careers in middle market companies."<br> <b>—Linda Livingstone, Dean of the Graziadio School of Business and Management, Pepperdine University</b> <p>"Our international association of independent M&A professionals recommends this text as the most comprehensive foundation for understanding the private capital marketplace. This book is essential reading for middle market M&A advisors, investors, and other decision-makers in the private capital markets."<br> <b>—Mike Nall, founder, Alliance of M&A Advisors</b> <p><b>A practical road map for making sound investment and financing decisions based on real experiences and market needs</b> <p>Now fully revised and in a second edition, <i>Private Capital Markets</i> provides lawyers, accountants, bankers, estate planners, intermediaries, and other professionals with a workable framework for making sound investment and financing decisions based on their own needs and experiences. <p>This landmark resource covers: <ul> <li>Private business valuation</li> <li>Middle market capital sources</li> <li>The business ownership transfer spectrum</li> <li>And much more</li> </ul> <p><i>Private Capital Markets, Second Edition</i> surveys the private capital markets and presents the proven guidance you need to navigate through these uncharted waters.

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