CORPORATE TRANSACTIONS AND BUSINESS VALUATION
Instructional goals
The course provides a theoretical and operational overview of corporate evaluation processes and of the main corporate transactions. Objective is to focus on the main evaluation methods and to analyze the most common corporate transaction, in order to promote a critical approach to their use, also in relation to the specific objectives pursued and their particular characteristics.
Intended learning outcomes
Knowledge and understanding: the student will acquire the basic knowledge both from a theoretical and operation point of view regarding the implementation by companies of corporate transactions and business valuation, variously applied.
Applying knowledge and understanding: the student will be able to describe and retrace corporate transactions and business valuation dynamics.
The achievement of these goals will take place with different case studies analysis and the development of a project work.
Making judgement: the student will be encouraged to develop a critical awareness such as to allow the formulation of independent judgments regarding a corporate transaction feasibility and the results achieved through business valuation methods application.
Communication skills: the student may gain the ability to describe corporate transactions and business valuation process’ salient aspects.
Learning skills : the student may be able to grasp what studied in the analysis of reference case studies and in the presentation project works.
Course Contents
The economic-financial aspects of the main corporate transactions.The capital configurations and the different methods of business valuation.
Exclusively for Corporate Transactions, this course analyzes the economic-corporate function of the main transactions, with an indication of the accounting and legal effects.
Reference Books
In order to Corporate Transactions: educational material will be provide by the teacher.
In Order to business evaluation: Bini, Guatri (2007) La valutazione delle aziende. Egea
Corbella, Liberatore, Tiscini (2020), Manuale di valutazione d'azienda, McGrawHill
Teaching Methods
Direct theoretical lessons.
Case studies discussion and analysis.
Experts testimonies.
Assessment Method
The maximum assignable mark at the end of the course is 33 points: 30% for the written exam, 35% for the project work about coprporate transactions and 35% for the project work about corporate evaluations.
1) Written exam only: this type of exam consists exclusively of a written test and does not include an oral exam. The marks are published on the specified website and the student receives notification of the result of the written exam, which will also be visible on the self-service website. Upon publication of the results, the student has 3 days to visualise the result and may refuse to accept it within that timeframe. Once the above period has concluded (3 days), the silence-signifies-assent rule is applied. At the time of publication of the results, it is indicated in which day, of the next three, the students who request it can visualize the exam task. Upon completion of the result registration process, the student receives a communication containing the final result obtained.
2) The Project work is assigned at the beginning of the course to a student team. Each team has to make a max 15 slides Power Point presentation, to discuss in 20-30 minutes in class. All team members has to present. In case of unjustified absence the PW mark will not be applied to each absent member.
Thesis assignment criteria
The request must be submitted at least 6 months before the estimated degree session.
Week 1
Introduction to the course. Overview and summary of the main corporate transaction.
The transformation: description of the operation and its economic-business function.
General scheme of transformation. General principles. The homogeneous and heterogeneous transformation. The right of withdrawal.
Week 2
Business transfer: description of the operation and its economic-business function.
The merger: description of the operation and its economic-business function. General scheme. The types of merger: by incorporation and by union. The leveraged and management buy-out.
Week 3
Economic aspects of a merger: surplus and deficit. The exchange ratio.
Week 4
Business (or business branch) spin-off: description of the operation and its economic-business function.
The demerger: civil and economic-accounting aspects.
General scheme. The types of demerger: partial / total - proportional / not proportional. Economic aspects: the demerger differences.
Week 5
The areas of corporate value measurement.
The characteristics of corportate evaluations. The notion of economic capital. Value and price of company capital.
The information base and fundamental analysis.
Strategic analysis. Analysis of the sustainability and reliability.
Week 6
The indirect methods of evaluation - part one
The economic value of capital. The analytical income method. The synthetic income method. The equity method. Asset and equity side valuations.
Week 7
The indirect evaluation methods - part two
Levered and unlevered cash flows. The Discounted Cash Flow Method. Application aspects of indirect methods.
Week 8
The indirect evaluation methods - part two
The mixed patrimonial-income model. The mixed model with independent estimate of the goodwill.
Exercise on capital needs.
Week 9
Focus on the mixed model.
Week 10
Direct evaluation methods.
The theory of multiples. Equity side multiples and asset side multiple. The multiples of comparable transactions. The multiples of comparable companies.
General recap and exam simulation.
Week 11
Project work presentation
Week 12
Project work presentation