Synopses & Reviews
Praise for Investment Banking"Investment Banking provides a highly practical and relevant guide to the valuation analysis at the core of investment banking, private equity, and corporate finance. Mastery of these essential skills is fundamental for any role in transaction-related finance. This book will become a fixture on every finance professional's bookshelf."
—Thomas H. Lee, President, Lee Equity Partners, LLC Founder, Thomas H. Lee Capital Management, LLC
"This book will surely become an indispensable guide to the art of buyout and M&A valuation, for the experienced investment practitioner as well as for the non-professional seeking to learn the mysteries of valuation."
—David M. Rubenstein, Co-Founder and Managing Director, The Carlyle Group
"As a practitioner of hundreds of M&A and LBO transactions during the last 20 years, I recommend this book to advisors, financiers, practitioners, and anyone seriously interested in investment transactions. Rosenbaum and Pearl have created a comprehensive and thoughtfully written guide covering the core skills of the successful investment professional with particular emphasis on valuation analysis."
—Josh Harris, Managing Partner, Apollo Management, LP
"Valuation is the key to any transaction. Investment Banking provides specific step-by-step valuation procedures for LBO and M&A transactions, with lots of diagrams and numerical examples."
—Roger G. Ibbotson, Professor in the Practice of Finance, Yale School of Management Chairman & CIO, Zebra Capital Management, LLC Founder & Advisor, Ibbotson Associates, a Morningstar Company
"Investment banking requires a skill set that combines both art and science. While numerous textbooks provide students with the core principles of financial economics, the rich institutional considerations that are essential on Wall Street are not well documented. This book represents an important step in filling this gap."
—Josh Lerner, Jacob H. Schiff Professor of Investment Banking, Harvard Business School, Coauthor, Venture Capital and Private Equity: A Casebook
"Rosenbaum and Pearl have written the ultimate nuts and bolts guide for valuation. It is the book that every business student should study and every investment banker should use."
—Steven Davidoff, Associate Professor, University of Connecticut School of Law The Deal Professor, The New York Times
Review
From the Foreword“Rosenbaum and Pearl succeed in providing a systematic approach to addressing a critical issue in any M&A, IPO, or investment situation—namely, how much is a business or transaction worth. They also put forth the framework for helping approach more nuanced questions such as how much to pay for the business and how to get the deal done. Due to the lack of a comprehensive written reference material on valuation, the fundamentals and subtlety of the trade are often passed on orally from banker-to-banker on a case-by-case basis. In codifying the art and science of investment banking, the authors convert this oral history into an accessible framework by bridging the theoretical to the practical with user-friendly, step-by-step approaches to performing primary valuation methodologies.”
–Joseph R. Perella, Chairman and CEO, Perella Weinberg Partners
Praise for the Book
"Investment Banking provides a highly practical and relevant guide to the valuation analysis at the core of investment banking, private equity, and corporate finance. Mastery of these essential skills is fundamental for any role in transaction-related finance. This book will become a fixture on every finance professional's bookshelf."
—Thomas H. Lee, President, Lee Equity Partners, LLC Founder, Thomas H. Lee Capital Management, LLC
"This book will surely become an indispensable guide to the art of buyout and M&A valuation, for the experienced investment practitioner as well as for the non-professional seeking to learn the mysteries of valuation."
—David M. Rubenstein, Co-Founder and Managing Director, The Carlyle Group
"As a practitioner of hundreds of M&A and LBO transactions during the last 20 years, I recommend this book to advisors, financiers, practitioners, and anyone seriously interested in investment transactions. Rosenbaum and Pearl have created a comprehensive and thoughtfully written guide covering the core skills of the successful investment professional with particular emphasis on valuation analysis."
—Josh Harris, Managing Partner, Apollo Management, LP
"Valuation is the key to any transaction. Investment Banking provides specific step-by-step valuation procedures for LBO and M&A transactions, with lots of diagrams and numerical examples."
—Roger G. Ibbotson, Professor in the Practice of Finance, Yale School of Management Chairman & CIO, Zebra Capital Management, LLC Founder & Advisor, Ibbotson Associates, a Morningstar Company
"Investment banking requires a skill set that combines both art and science. While numerous textbooks provide students with the core principles of financial economics, the rich institutional considerations that are essential on Wall Street are not well documented. This book represents an important step in filling this gap."
—Josh Lerner, Jacob H. Schiff Professor of Investment Banking, Harvard Business School, Coauthor, Venture Capital and Private Equity: A Casebook
"Rosenbaum and Pearl have written the ultimate nuts and bolts guide for valuation. It is the book that every business student should study and every investment banker should use."
—Steven Davidoff, Associate Professor, University of Connecticut School of Law The Deal Professor, The New York Times
Synopsis
In the constantly evolving world of finance, a solid technical foundation is an essential tool for success. Due to the fast-paced nature of this world, however, no one has been able to take the time to properly codify the lifeblood of the corporate financier's work-namely, valuation. Rosenbaum and Pearl have responded to this need by writing the book that they wish had existed when they were trying to break into Wall Street.
Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions is a highly accessible and authoritative book that focuses on the primary valuation methodologies currently used on Wall Street—comparable companies, precedent transactions, DCF, and LBO analysis. These methodologies are used to determine valuation for public and private companies within the context of M&A transactions, LBOs, IPOs, restructurings, and investment decisions. Using a step-by-step how-to approach for each methodology, the authors build a chronological knowledge base and define key terms, financial concepts, and processes throughout the book. They also provide a comprehensive overview of the fundamentals of LBOs and an organized M&A sale process.
In the aftermath of the subprime mortgage crisis and ensuing credit crunch, the world of finance is returning to the fundamentals of valuation and critical due diligence. This involves the use of more realistic assumptions governing approach to risk as well as a wide range of value drivers. While valuation has always involved a great deal of "art" in addition to time-tested "science," the artistry is perpetually evolving in accordance with market developments and conditions. In this sense, this book is particularly topical-in addition to detailing the technical fundamentals behind valuation, the authors infuse practical judgment skills and perspective to help guide the science.
Synopsis
Investment Banking 2E focuses on the primary valuation methodologies currently used on Wall Street, namely comparable companies analysis, precedent transactions analysis, discounted cash flow analysis, and leveraged buyout analysis. These methodologies are used to determine valuation for public and private companies within the context of M&A transactions, LBOs, IPOs, restructurings, and investment decisions. They also form the cornerstone for valuing companies on a standalone basis, including an assessment of whether a given public company is overvalued or undervalued. Using a step-by-step, how-to approach for each methodology, Josh R. and Josh P. build a chronological knowledge base and define key terms, financial concepts, and processes throughout the book. The authors also provide context for the various valuation methodologies through a comprehensive overview of the fundamentals of LBOs and an organized M&A sale process, including key participants, concepts, financing sources and terms, strategies, and legal and marketing documentation. In the aftermath of the subprime mortgage crisis and ensuing credit crunch, the world of finance is returning to the fundamentals of valuation and critical due diligence for M&A, capital markets, and investment opportunities. This involves the use of more realistic assumptions governing approach to risk as well as a wide range of valuation drivers such as expected future company financial performance, discount rates, multiples, leverage levels, and financing terms. While valuation has always involved a great deal of "art" in addition to time-tested "science," the artistry is perpetually evolving in accordance with market developments and conditions. In this sense, this book is particularly topical--in addition to detailing the technical fundamentals behind valuation, the authors infuse practical judgment skills and perspective to help guide the science.
Synopsis
The companion Workbook to Investment Banking, Second EditionIf you want to get more out of Investment Banking, Second Edition, then pick up the Investment Banking Workbook. This comprehensive study guide provides you with an invaluable opportunity to explore your understanding of the strategies and techniques covered in the main text, before putting it to work in real-world situations.
- Contains informative question-and-answer sections that correspond to the topics covered throughout the actual book
- Includes a refreshed Test Bank to test your knowledge and hone your skills
- Covers various investment-banking issues from valuation to leveraged buyouts and mergers & acquisitions
Investment Banking Workbook is filled with a wealth of practical learning exercises and information that will help you understand and apply the proven principles found in the Second Edition of Investment Banking.
Synopsis
In the constantly evolving world of finance, a solid technical foundation is an essential tool for success. Due to the fast-paced nature of this world, however, no one has been able to take the time to properly codify the lifeblood of the corporate financier’s work—namely, valuation. Rosenbaum and Pearl have responded to this need by writing the book that they wish had existed when they were trying to break into Wall Street.
Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions is a highly accessible and authoritative book that focuses on the primary valuation methodologies currently used on Wall Street—comparable companies, precedent transactions, DCF, and LBO analysis. These methodologies are used to determine valuation for public and private companies within the context of M&A transactions, LBOs, IPOs, restructurings, and investment decisions. Using a step-by-step how-to approach for each methodology, the authors build a chronological knowledge base and define key terms, financial concepts, and processes throughout the book. They also provide a comprehensive overview of the fundamentals of LBOs and an organized M&A sale process.
In the aftermath of the subprime mortgage crisis and ensuing credit crunch, the world of finance is returning to the fundamentals of valuation and critical due diligence. This involves the use of more realistic assumptions governing approach to risk as well as a wide range of value drivers. While valuation has always involved a great deal of “art” in addition to time-tested “science,” the artistry is perpetually evolving in accordance with market developments and conditions. In this sense, this book is particularly topical—in addition to detailing the technical fundamentals behind valuation, the authors infuse practical judgment skills and perspective to help guide the science.
Synopsis
The ideal companion to Investment BankingInvestment Banking WORKBOOK is the ideal complement to Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions, Second Editionenabling you to truly master and refine the core skills at the center of the world of finance. This comprehensive study guide provides an invaluable opportunity to explore your understanding of the strategies and techniques covered in the main text before putting them to work in real-world situations.
The WORKBOOK, which parallels the main book chapter by chapter, contains over 400 problem-solving exercises and multiple-choice questions.
Topics reviewed include:
- Valuation and its various forms of analysis, including comparable companies, precedent transactions, and DCF analysis
- Leveraged buyoutsfrom the fundamentals of LBO economics and structure to detailed modeling and valuation
- M&A sell-side tools and techniques, including an overview of an organized M&A sale process
- M&A buy-side strategy and analysis, including a comprehensive merger consequences analysis that includes accretion/(dilution) and balance sheet effects
The lessons found within will help you successfully navigate the dynamic world of investment banking, LBOs, and professional investing. Investment Banking WORKBOOK will enable you to take your learning to the next level in terms of understanding and applying the critical financial tools necessary to be an effective finance professional.
Investment Banking FOCUS NOTES is available for purchase for further self-study
Synopsis
Investment Banking WORKBOOK is the ideal complement to
Investment Banking, Valuation, Leveraged Buyouts, and Mergers & Acquisitions, Second Edition, enabling you to truly master and refine the core skills at the center of the world of finance. This comprehensive study guide provides an invaluable opportunity to explore your understanding of the strategies and techniques covered in the main text, before putting them to work in real-world situations.
The WORKBOOK—which parallels the main book chapter by chapter—contains over 400 problem-solving exercises and multiple-choice questions.
Topics reviewed include:
- Valuation and its various forms of analysis, including comparable companies, precedent transactions and discounted cash flow analysis
- Leveraged buyouts—from the fundamentals of LBO economics and structure to detailed modeling and valuation
- M&A sell-side tools and techniques, including an overview of an organized M&A sale process
- M&A buy-side strategy and analysis, including a comprehensive merger consequences analysis that includes accretion/(dilution) and balance sheet effects
The lessons found within will help you successfully navigate the dynamic world of investment banking and professional investing.
Investment Banking WORKBOOK will enable you to take your learning to the next level in terms of understanding and applying the critical financial tools necessary to be an effective finance professional.
Synopsis
The ideal companion to Investment BankingInvestment Banking WORKBOOK is the ideal complement to Investment Banking: Valuation, Leveraged Buyouts, and Mergers & Acquisitions, Second Editionenabling you to truly master and refine the core skills at the center of the world of finance. This comprehensive study guide provides an invaluable opportunity to explore your understanding of the strategies and techniques covered in the main text before putting them to work in real-world situations.
The WORKBOOK, which parallels the main book chapter by chapter, contains over 400 problem-solving exercises and multiple-choice questions.
Topics reviewed include:
- Valuation and its various forms of analysis, including comparable companies, precedent transactions, and DCF analysis
- Leveraged buyoutsfrom the fundamentals of LBO economics and structure to detailed modeling and valuation
- M&A sell-side tools and techniques, including an overview of an organized M&A sale process
- M&A buy-side strategy and analysis, including a comprehensive merger consequences analysis that includes accretion/(dilution) and balance sheet effects
The lessons found within will help you successfully navigate the dynamic world of investment banking, LBOs, and professional investing. Investment Banking WORKBOOK will enable you to take your learning to the next level in terms of understanding and applying the critical financial tools necessary to be an effective finance professional.
Investment Banking FOCUS NOTES is available for purchase for further self-study
About the Author
Joshua Rosenbaum is a Managing Director at UBS Investment Bank in the Global Industrial Group. He originates, structures, and advises on M&A, corporate finance, and capital markets transactions. Previously, he worked at the International Finance Corporation, the direct investment division of the World Bank. He received his AB from Harvard and his MBA with Baker Scholar honors from Harvard Business School.
Joshua Pearl is an investment analyst at Brahman Capital Corp. Previously, he structured and executed leveraged loan and high yield bond financings, as well as leveraged buyouts and restructurings as a Director at UBS Investment Bank in Leveraged Finance. Prior to UBS, he worked at Moelis & Company and Deutsche Bank. He received his BS in Business from Indiana University’s Kelley School of Business.
Table of Contents
About the Authors vii
Acknowledgments ix
INTRODUCTION 1
Target Audience 1
Content and Applications 2
Chapter 1
Comparable Companies Analysis 3
Questions 3
Answers and Rationale 28
Chapter 2
Precedent Transactions Analysis 55
Questions 55
Answers and Rationale 76
Chapter 3
Discounted Cash Flow Analysis 93
Questions 93
Answers and Rationale 120
Chapter 4
Leveraged Buyouts 149
Questions 149
Answers and Rationale 160
Chapter 5
LBO Analysis 169
Questions 169
Answers and Rationale 189
Chapter 6
Sell-Side M&A 205
Questions 205
Answers and Rationale 217
Chapter 7
Buy-Side M&A 225
Questions 225
Answers and Rationale 243