Introduction

Just because a company needs restructuring -- financial or operational -- does not mean it will do so. An erosion of Stakeholder value may occur for a variety of reasons, including Management interference. This program shows you how to do things right.

Corporate restructuring is defined as any fundamental change in a company's business or financial structure, designed to increase the company's value. Corporate restructuring is often divided into two parts; either 1) Financial restructuring or 2) Operational restructuring. This seminar emphasizes the practical side of corporate restructuring in today’s ever-challenging world. It focuses on the two objectives of the practical application through case studies, examples and Excel® models as well as discussions of alternatives. Main ideas explored include:

• What is restructuring & what are the alternatives

• When & why should you restructure vs. not

• How to calculate the “real” value of a firm both before & after a restructuring

• What is Leverage; when to use it and how best to finance it

• When to divest an operating unit & how to do it to optimize the remaining value

Objectives

On completion of this module delegates will be able to:

• Fully understand the various form of restructuring

• Discuss the real difference between Corporate & Financial restructuring

• Know when to acquire vs. divest an operating unit

• How to value an entity or an entire firm

• Know when to Leverage vs. Deleverage

• Learn to use a range of Excel models (provided)

Target Audience

• Corporate finance managers and financial controllers
• Restructuring, turnaround, and transformation specialists
• Investment bankers and financial advisors
• Private equity and M&A professionals
• Strategy and corporate development managers
• Senior executives involved in business restructuring decisions
• Management accountants and financial analysts
• Risk management and valuation professionals
• Business owners and entrepreneurs managing distressed or underperforming firms
• Project managers involved in operational restructuring initiatives
• Professionals seeking advanced knowledge in valuation, leverage, and corporate restructuring
• Consultants in strategy, finance, and organizational transformation

Outlines

Day 1:

Introduction to Restructuring

• Introduction to restructuring

• The Restructuring Framework

• Proactive – planning the restructure before it is needed

• Defensive - planning the restructure because it is needed

• Distress - planning the restructure when the is no choice

• Restructuring parties

• Creditors – what do they expect

• Shareholders– what do they hope for

• Employees– what do they wish for

• Case study

• Excel model for decision

Day 2:

The Why & How of Restructuring

• The Why & How of it

• Why companies really restructure

• How do companies successfully restructure in today’s world

• When is the right time to restructure

• The coordination and implementation of it all

• The checklist for success

• The “as is” value - what is the firm worth today

• What is the product/service mix to decide what to keep and what to divest

• Strategic partner or merger – the difference brings what value

• Leverage – yes or no; pros & cons

• Example

• Case study

• Excel model for decision

Day 3:

Valuation in Restructuring

• Valuation

• Which approach to use to be the most accurate

• Liquidation value

• Fire sale

• Orderly

• Asset-based methods

• Comparables – market-driven

• Free cash flows

• Free cash flow to the firm

• Free cash flow to equity

• Option-based

• Case study

• Excel model for decision

day 4:

Leverage

• Leveraging and deleveraging

• Leverage – yes or no; pros & cons

• Establishing required rates of return

• Adjusting the costs of debt and equity for leverage

• Leverage optimization through capital structure (Example)

• Bond buybacks (Example)

• Leveraged Buy-Out (LBO)

• Going private – the costs vs. the benefits

• The rationale for high leverage

• Calculating your capacity for debt]

• Case study

• Excel model for decision

day 5:

Divestitures

• Divestitures

• Why divest a business unit

• The rationale for divestiture vs. alternatives

• Divestiture vs. a spin-off

• Equity carve-outs

• Voluntary liquidations

• Case study

• Excel model for decision

• Summary and Conclusion