| Preface |
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| About the Authors |
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| PART ONE Planning |
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Mergers and Acquisitions: A Way of Corporate Life |
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Acquisition Risk and Due Diligence |
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Preventable Causes of Failure |
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Myopic Approach to Due Diligence |
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Compartmentalized Behavior |
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Exclusive Focus on Risk Mitigation |
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Holistic View of Due Diligence |
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Due Diligence and Value Creation |
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CHAPTER 2 Planning for Value Creation: Growth Strategy |
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Central Role of Strategic Planning |
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The Strategic Planning Process |
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Characteristics of an Effective Planning Process |
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Infrastructure Improvement |
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Characteristics of Investment Types |
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CHAPTER 3 Implementing the Growth Strategy |
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From Identification to Pursuit |
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Choosing an Acquisition Strategy |
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Marketplace for Acquisitions |
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U.S. Antitrust Considerations |
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Role of Management versus Intermediaries |
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Confidentiality of Information: Nondisclosure Agreement (NDA) |
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Notification/Approval Document |
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Transaction Framework: Sellers' and Acquirers' Different Perspectives |
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Taking Action: Assembling the Core Acquisition Team |
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| PART TWO Investigation |
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CHAPTER 4 Preparing for Due Diligence |
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External Constraints of the Sale Process |
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Internal Limitations of the Acquirer |
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Nature of the Target Company |
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Impact of Environmental Factors on the Review |
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Creation of the Due Diligence Team |
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Composition of the Due Diligence Team |
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Initial Preparation Measures |
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Development of the Due Diligence Program |
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Program Development Process |
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Key Aspects of the Due Diligence Program |
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Objectives, Procedures and Findings, and Recommendations Illustrated |
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Mechanisms for Team Coordination |
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Resolve Issues of Overlap |
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Maintain an Aggressive Posture |
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Communicate Logistical Information |
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Communicate Responsibility and Timing of Report Submissions |
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Appendix 4A: Due Diligence Checklist |
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I. Review Company Background and Organization and Proposed Transaction |
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CHAPTER 5 Conducting the Due Diligence Review |
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Overview of Transaction Types |
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Auctions: The Buyer's Perspective |
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Purchase Premium Preemption |
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Price Preemption: The Buyer's Perspective |
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Relationship-Based Preemption |
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Relationship-Based Preemption: The Buyer's Perspective |
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Summary of Transaction Characteristics |
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Components of the Due Diligence Review |
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Management Team Interviews |
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Due Diligence Reviews: An Objectives-Driven Approach |
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Information Technology Review |
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Operations/Production Review |
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Legal and Insurance Review |
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Cross-Functional Coordination and Analysis |
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Appendix 5A: Illustrative Final Process Letter Outline |
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Description of Transaction Process |
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Guidelines for Final Offers |
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Appendix 5B: Illustrative Data Room Information Listing |
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CHAPTER 6 Reporting on Due Diligence: Deliverables and Decisions |
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Outcomes of the Due Diligence Review |
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The Importance of Backup Planning |
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Elimination in the Auction Process |
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Renegotiations of Major Terms |
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Comprehensive Due Diligence Report |
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Summary Due Diligence Report |
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Corporate Approval Document |
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| PART THREE Execution |
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CHAPTER 7 Optimizing Value: Translating Due Diligence Findings into Action |
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Acting on Due Diligence Findings |
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Preacquisition vs. Postacquisition Issues |
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Revisiting the Valuation and Purchase Price |
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Reviewing the Acquisition Transaction Structure |
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Contingent Purchase Price |
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Acquiring Assets vs. Stock |
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Sharing Risk: Contractual Terms and Conditions |
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Marking Up the Draft Purchase Agreement |
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Contract Drafting and Revision |
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Key Sections of the Purchase Agreement |
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Representations and Warranties of the Seller |
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Representations and Warranties of the Buyer |
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Transition Services Agreement |
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Managing Contract Negotiations |
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Effective and Efficient Negotiations |
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Commitment to Getting the Deal Done |
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Shepherding the Transaction toward Closing |
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Hart-Scott-Rodino (HSR) Act |
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CHAPTER 8 Integration: Extracting Value and Mitigating Risk |
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Dual Focus of the Integration Effort |
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Structure and Composition |
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First 90 Days vs. Longer Term |
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Management of the Integration Process |
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Reporting and Decision Making |
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Recommendations for Postacquisition Management |
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| APPENDIX What Is the Premerger Notification Program: An Overview |
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253 | |
| Index |
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