Darryl Laws News

  Although I expect diversification to be an important motive to some CEOs of acquisitive firms, I do not expect it to be the top-ranked motive. I expect that evidence will suggest that a much more negative view of diversifying takeovers.  Second, what views do private equity fund managers and CEOs have about the relationship between mergers and acquisitions and the premium price paid for a target company? Roll (1986) and Jensen (1986) Abour, Zhao’s (2009) papers interpret the impacts of the premium price paid for target company acquisitions does not support the view that paying a high premium does not impact the port merger performance of a company three years subsequent to the acquisition. I am expecting different results since the genre of y study is 2018-2019. Third, what methods do CEOs use to value or premium price that they will pay for a target company? I expect that the DCF method is the most common approach used to value both publicly-held and closely-held target fir...

  Part III. Qualitative Questions to be asked in Face to Face Interviews. What role do you typically play in a merger and acquisition transaction? M&A lawyer ___ If so, Buy side rep ___ or Seller side rep ___ M&A Investment Banker ___ If so, Buy side rep ___ or Seller side rep ___ Private equity buyout fund manager ___ CEO of a Public company ___ CEO of a private company ___ How many years of M&A industry experience do you have? ___ Are you typically a Buyer ___ or Seller ___ [“yes” or “no”]? In your opinion, what are the five (5) most prominent irrational human behaviors exhibited in an M&A transaction that you have witnessed?  Please rank the following 1 to 10 with 10 being the highest ranking. CEO overconfidence ___ CEO Hubris ___ Greed ___ Fear ___ Anchoring bias ___   Confirmation bias ___ Sunk cost fallacy ___ Irrational escalation of commitment ___ Winner’s curse ___  Please describe the context and the role of the person ...

  11.  When the target happens to be a closely-held (private) company, we determine the offer price in the following manner. This question does not apply to my firm because we did not acquire any private company. Applying industry price-to-earnings multiple to the earnings of the company to be acquired. Applying industry enterprise multiples (TTM EBITDA x  value multiple) to the earnings of the company to be acquired. Discounted cash flow approach combined with WACC. We use the following method to determine the offer price for a closely-held company. (Please fill in.) 12.  During January 1, 2018 - December 31, 2019, our CEO lead the company acquisition transactions that ultimately did not increase shareholder value. Yes No If the answer to #12 is “was no,” please skip to question #15. If the answer is “yes,” please continue. 13.  My firm was involved in the following type(s) of acquisition or merger. (Please check all that apply.) 100% all cash (internal...

  5.Mergers / acquisitions for diversification for greater economies of scale (saving of cost) do not necessarily create value because: (Please check all that apply). a company does not need to diversify; shareholders can diversify on their own. diversification results in the parent company losing its focus. a company should stay in the business it knows best. 6.Diversification can be a good reason to acquire of merge because it (Please check all that apply.): reduces/avoids the need for external capital by transferring capital internally. results in less devastating effects on the firm during economic downturns as not all sectors of a firm are expected to perform equally poorly during such downturns. takes advantage of the seasonality of the production cycle, 7.    My firm was directly or indirectly involved in synergy-related mergers. Yes No If the answer to #7 is no, please skip to question #9. 8. Decisions to make an acquisition or a Merger are driven by the f...

  For these nine questions, I will use one-sample t-tests to determine whether the level of agreement or disagreement differs significantly from zero, which represents a “no opinion” response. I developed my original set of questions based on an extensive comprehensive literature review of books, journal articles and previous surveys on the motives for mergers and acquisitions as well as practices used in valuing acquisitions. During the second trimester of Ann Feyerherm’s class I pre-tested a preliminary version of my survey questions by sending it to five (5) M&A professions, (one M&A Lawyer, two private equity fund managers and an acquisitive company CEO).  Self-Administered Questionnaire. My survey questionnaire will include five areas of inquiry; first area involves background data on the number and average size of the acquisitions (Q1 - Q2). The second group of questions concerns motives for making decisions to enter into mergers and acquisition transaction (Q...

  Respondents are more comfortable . The Likert scale from 1 to 5 has a mid-point. Respondents often find it difficult to define their views on scales with values ​​ greater than seven. This means that if you offer more than seven answer choices, respondents are likely to choose their answers at random and thus, their data will be insignificant. It is recommended using five-point scales for single scales, the presence or absence of a selected attribute is referred. The seven-point bipolar scales are best used when two sensations or different attributes related to each other are compared. Likert Scale Advantages. Likert Scale based survey questions provide a number of clear advantages, here are a few of them. Easy to understand and implement. Quantifiable answers support statistical analysis, reporting and representation. Respondents find Likert answer scales easy to understand and use. Likert scales provide the facility to record varied opinions. Likert Scale Disadvantages. While t...