University of Miami Finance Mergers and Acquisitions Paper

Prior to beginning work on this assignment, read Chapters 1, 7, 15, and 26 in the textbook as well as the Jayaraman, Khorana, & Nelling (2002). Carefully review the Company Profile and Due Diligence Guidelines that is attached. You will support your findings and recommendations with evidence from at least five scholarly and/or professional sources in addition to the required annual reports for your chosen acquiring and target companies. Be sure to include any links to professional websites used as references or to access company information.

In this assignment, you will develop general and financial information for a chosen acquiring company and target company for a merger and/or acquisition. The companies you choose for the acquiring and target companies must fall within the predetermined parameters set forth in the Company Profile and Due Diligence Guidelines. The companies I recommend to use are Disney acquiring 21st century if they meet the guidelines. If those two companies do not meet the guidelines and you can find a better acquisition pair of US domestic companies within the last 10 years, then feel free to use it but let me know first and I will confirm if that option is available as we are not able to use an option already chosen by someone else.

Research, locate, and review annual reports for several companies that fall within the parameters provided, and select both an acquiring and target company. Once you have identified both entities, you will generate company profiles for both the selected acquiring company and the selected target company, including the general and financial information outlined below.

General Information

1. Provide the exact corporate names of the acquiring and target companies.
2. Provide a brief history of the acquiring and target companies from the companies’ published materials.
3. Create a brief description of the companies’ current products and/or services.
4. Provide the date and state of incorporation as well as the states in which the companies are qualified to do business.

Financial Information

1. Summarize the acquiring and target companies’ financial statements for the last three years, highlighting the strengths and weaknesses.
2. Summarize the acquiring and target companies’ working capital positions for the last three years, including normal requirements based on trade practices.
3. Explain the Terms of Acquisition.
   • Analyze strategic alternatives to mergers and acquisitions activity and explain the reasons for purchase and sale based upon your chosen companies. (Some guiding questions to ask are the following: Are we to acquire or be acquired, and how do we posture ourselves accordingly? What are the reasons for merging?)
   • Explain the price to be paid for the target company.
   • Describe the terms of payment between the two companies.
   • Explain the financing from the perspective of the acquiring company.
   • Explain how the brokerage fees will be handled and the integration of the investment banker into the process.
   • Explain how consultants will assist with tax considerations for both companies.
   • Recommend and explain several tax due diligence models (valuation) or strategies that could be used, including consequences and any necessary mitigations of tax risks.