mestokaplice Finance

Scope Of Mergers And Acquisitions

Mergers & Acquisition have gained popularity throughout the world in the recent times. They have become popular due to globalization, liberalization, technological developments & intensely competitive business environment. Mergers and acquisition are a big part of the corporate finance world. This process is extensively used for restructuring the business organization. In India, the concept of mergers and acquisition was initiated by the government bodies. The Indian economic reform since 1991 has opened up a whole lot of challenges both in the domestic and international spheres. The increased competition in the global market has prompted the Indian companies to go for mergers and acquisitions as an important strategic choice.

The trends of mergers and acquisitions in India have changed over the years. The immediate effects of the mergers and acquisitions have also been diverse across the various sectors of the Indian economy. Mergers and Acquisitions (M&A) have been around for a long time and has experienced waves of popularity during these times and they are very much an important part of todays business world. They have also become increasingly international which can be due to the rising global competition. The popularity of cross-border M&As makes it important to look at them from an international perspective

As a subject in PGDM one studies the aspect of valuation in Mergers i.e. how a company decides about the amount that has to be paid for acquiring. Basically M&A emerged as a strategic issue but now a days, valuation aspect has gained more popularity.There are thousands of investment bankers who are daily engaged in valuations and in the coming years this trend is expected more in Banking sector as well as other sectors too. So one should study this subject in PGDM as well as PGDM (BFS).One will find this subject very interesting as it involves knowledge from every field.

They are suitable for those studying advanced undergraduate and MBA courses in top MBA colleges, industrial organizations, finance, business strategy, and corporate governance, as well as those preparing for exams set by professional bodies. Mergers & Acquisitions focuses on how to value and analyze opportunities in this market; how to design and value consideration and deal protection measures; how to initiate and defend against hostile bids; and how to integrate businesses after a deal is struck.

The recent acquisition of Zain by Bharti airtel is a well known example of this subject as once you start reading about the deal your interest keeps on increasing about the day to day news because people attached with this field have a zeal to know what will happen next, whether this deal will show positive signs or negative signs for the stock market. Mergers & Acquisitions teaches both qualitative and quantitative analysis: most cases require a balance of financial techniques and business judgment grounded in institutional facts. The course seeks to promote good judgment in the evaluation, structuring and management of mergers and acquisitions.

Business Credit Line Funding On Remote Control Asset Based Lending And Funding Delivers

Business credit line funding needs can be achieved in more ways than one. The concept of having your funding needs on a ‘ remote control ‘ should be very appealing to most business owners / financial managers. Asset based lending via ‘ ABL ‘ credit lines is one way to put your company on cash flow auto pilot. Here’s how. Let’s dig in.

Businesses requiring SME COMMERCIAL FINANCE funding for cash flow are always challenged by the requirements of our somewhat monopolistic banking system in Canada. The strength, market dominance, and the regulated nature of our banks make it often difficult for companies who are even doing quite well to achieve some or all of the financing they need. Simply speaking they fall ‘ outside the box ‘ when it comes to requirements that include profits, cash flows, clean balance sheets, etc.

The banks requirement of covenants in cash flow, debt, profits, equity simply can sometimes not be always met, and these are typically a written part of your bank arrangements. Firms who fall ‘ out of covenant ‘ with their bank often find themselves feeling not so ‘ special ‘ when they are placed in Special Loans Default dept’s at the bank .

When properly managed and utilized (and structured in advance!) this type of cash flow funding allows you to”

Finance operations

Engage larger clients/ larger orders/contracts

Finance inventory which in many bank circumstances is sometimes not achievable

Typically you would never use your revolving asset based credit line as a mechanism to acquire new assets – this is typically done via equipment leases or bridge loans that sometimes are more applicable when a firm is in a financing transition.

By the way, in a merger and acquisition scenario the Asset Based Credit Line is an excellent way to successfully acquire a target company.

How does the ongoing access to liquidity work in Asset based lending? A/R is often financed at 90%, and inventory borrowing margins, while depending on the type of inventory class (raw materials, work in process, finished goods) can range from 25-75% borrowing power. Should a business choose to monetize fixed assets as part of their revolving credit facility typically a third party appraisal/valuation is required.

It should be noted that ongoing reporting requirements are typical of an asset based line of credit – in some cases owners/managers might find rigorous monthly ( sometimes weekly ) reporting as a ‘ downside ‘ of ABL cash flow financing . While 99% of the time pricing on these facilities is higher than bank credit the alternative is a liquidity crisis for ongoing operations of growth.

We’ve shown how not all business credit lines are not created equal. If you’re prepared to investigate the applicability of asset based lending to your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your funding needs.

Stan Prokop

Pros and Cons of Stock Warrants

While stock warrants do provide a means of entering the share market without actually buying shares, they they do have pros and cons.

While stock warrants do have benefits they also have a downside that makes astute investors somewhat wary of purchasing them. Here are some pros and cons.

Pros:

* Buying stock warrants is much cheaper; it allows the investor to get shares in a company with less capital outlay. This is good if you are looking for capital appreciation as opposed to income.

* The percentage gain is often greater than if shares were purchased.

* Stock warrants have greater liquidity – at least at the present time. This is due to the promotion by marketers.

* The short to medium term often nets good capital appreciation.

Cons:

* Stock warrants can become worthless after they expire – not good if you are still holding them. Even if they were given for free as part of another deal there is that opportunity for gain lost.

* No dividends apply to stock warrants. So if you invest in stock warrants in blue chip industries you forego the dividend you would have got with buying the actual shares.

* When the prices of stock warrants change someone – buyer or seller – is going to be the loser.

So what is the best time or way to purchase stock warrants? If your assessment of the situation tells you that there is going to short or medium term gain you could buy stock warrants. You could also use them carefully by allotting a smaller percentage of your capital investment in stock warrants for the same financial benefit or risk that you would incur if buying the mother shares. Then you could invest your remaining (larger) portion of capital into something that is even better.

Mel writes about stock warrants among other finance related topics.

How Home Insurance Makes An Obligatory Purchase For Every Individual

Home insurance is a necessity for every individual. Perhaps, people are unaware about its benefits and how it is a must buy. Here are some of these major benefits in detail-

#1. Wiser investment-

Home insurance is one such insurance that covers all your assets and other valuable items under one policy. Instead of purchasing different policies for all the assets, it’s wiser to choose a single policy that comes with affordable premiums as well. There are many home insurance providers in the market which operate online and provide all necessary information through their websites. This helps in comparing policies of different insurance providers in the market, and choosing the suitable one.

#2. Lowest premiums policies-

While purchasing a home insurance one should always consider maximum damage coverage and lowest premiums, so the best purchase can be made. However, it is something hard to find. This is where an online insurance provider makes the solution. It delivers a detailed information about each policy online, that gives an easy access to all the consumers and enormous time savings. With a customizable option, it also enables a easy buy as per the requirement and budget. This helps every individual to make an affordable investment, which provides a financial security for their assets in all the circumstances, and keeps them away from an accidental expenditures.

#3. Peace of mind and additional savings-

Home insurance is a financial safeguard in case your house or house hold properties get damage because of fire, theft or any natural disaster. These are unpredictable happenings that require a large amount of expenditure as and when occurred. This is where home insurance makes a shield and keeps you away from such expenses. Also, it gives you additional savings that can be used for better investments for a secured future. Home insurance makes a vital purchase for every individual that not only makes a wiser investment, but also delivers an absolute protection for self and family.

#4. Assured protection for house and household properties-

House makes an absolute protected environment that ensures shelter and safety. Simultaneously, keeping it safe makes an obligation for every individual. This is where buying a home insurance makes the solution. It is not just an insurance but an assurance of a complete financial security, in case your house or other valuable assets get damaged because of various factors (included in the policy). Along with the reinstatement value, these factors may influence the premium value.

#5. Safe future for you and family-

Be it house or any commercial property, both are not easy made, rather require huge investments. The same way if these get damaged, they even require big amount of money for their reconstructions. This is where buying a home insurance keeps your residential property safe and protected. It also gives an absolute protection for the family, even when the policy owner deceases due to an accidental happening. Perhaps, this clause needs to be discussed before purchasing a home insurance, as every insurance provider may not include an accidental death clause in their policies. Therefore, for a secured future of family and self, buying a home insurance makes a must-buy for every individual.

Thus we conclude, home insurance provides a total protection for house and house hold contents in any circumstances. Therefore, in order to stay protected, home insurance makes a vital and obligatory purchase for every individual.

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