Capitaliq Tutorial
CAPITAL IQ 202
M&A TRANSACTION SCREENING
January 31, 2012
© Margolis Market Information Lab
CIQ202
PREREQUISITES
• Capital IQ 101
– Tearsheets – Screening – Formula Builder – Excel Plug-in
January 31, 2012
© Margolis Market Information Lab
CIQ202
AGENDA
• Mergers and Acquisitions
•
• •
Valuation
Capital IQ Screening Applications of Capital IQ Screening
January 31, 2012
© Margolis Market Information Lab
CIQ202
MERGERS AND ACQUISITIONS
• Mergers and acquisitions significantly influence financial markets
– Deals can range from millions to billions of dollars – Success of deal will determine success or failure of both companies and management
•
M&A deals have two types of buyers:
– Financial buyer
• Acquires company for financial gain • Usually describes private equity firms • Believes target is undervalued
– Strategic buyer
• Acquires company for strategic reasons (access new markets, synergies, growth, etc.) • Done by firms in similar operating industries • Will pay a control premium for target firm
January 31, 2012
© Margolis Market Information Lab
CIQ202
M&A – VALUATION
• In addition to financial or strategic reasons, buyers only acquire firms for the right price
– Necessary to determine a fair valuation for the target firm
•
Valuation Techniques
– Discounted Cash Flow
• Determines intrinsic value of firm based on projected future cash flows
– Trading comparables
• Look to similar firms’ trading information to determine an implied value for your target firm
– Precedent transactions
• Look for historical transactions that are similar to your deal
January 31, 2012
© Margolis Market Information Lab
CIQ202
VALUATION – MULTIPLES
• Valuation multiples attempt to capture a firm’s operating and financial characteristics in a single number, to be multiplied by a financial metric (e.g. EBITDA) to yield an equity or enterprise value
– Ex: Value of company = Company’s
M&A TRANSACTION SCREENING
January 31, 2012
© Margolis Market Information Lab
CIQ202
PREREQUISITES
• Capital IQ 101
– Tearsheets – Screening – Formula Builder – Excel Plug-in
January 31, 2012
© Margolis Market Information Lab
CIQ202
AGENDA
• Mergers and Acquisitions
•
• •
Valuation
Capital IQ Screening Applications of Capital IQ Screening
January 31, 2012
© Margolis Market Information Lab
CIQ202
MERGERS AND ACQUISITIONS
• Mergers and acquisitions significantly influence financial markets
– Deals can range from millions to billions of dollars – Success of deal will determine success or failure of both companies and management
•
M&A deals have two types of buyers:
– Financial buyer
• Acquires company for financial gain • Usually describes private equity firms • Believes target is undervalued
– Strategic buyer
• Acquires company for strategic reasons (access new markets, synergies, growth, etc.) • Done by firms in similar operating industries • Will pay a control premium for target firm
January 31, 2012
© Margolis Market Information Lab
CIQ202
M&A – VALUATION
• In addition to financial or strategic reasons, buyers only acquire firms for the right price
– Necessary to determine a fair valuation for the target firm
•
Valuation Techniques
– Discounted Cash Flow
• Determines intrinsic value of firm based on projected future cash flows
– Trading comparables
• Look to similar firms’ trading information to determine an implied value for your target firm
– Precedent transactions
• Look for historical transactions that are similar to your deal
January 31, 2012
© Margolis Market Information Lab
CIQ202
VALUATION – MULTIPLES
• Valuation multiples attempt to capture a firm’s operating and financial characteristics in a single number, to be multiplied by a financial metric (e.g. EBITDA) to yield an equity or enterprise value
– Ex: Value of company = Company’s