Case Study On Target Enterprises Selection And Value Assessment In Mergers And Acquisitions

Merger and acquisition is a very important strategic investment means in the process of enterprise’s expansion.Compared with general project investment,merger and acquisition is a more risky strategic investment aboard.Therefore,in order to avoid the risk of investment aboard,a selection model and an evaluation model are established in the process of merger and acquisition,so a high-quality target enterprises can be selected by it,at the same time precise value evaluation of target enterprises can also be done.This thesis thinks that,all factors will be researched and analyzed after taking them into the framework of the ultimate goal of M&A strategies according to their own comprehensive situation when making M&A decisions,then formulate a scientific,rational and effective M&A strategic plan,M&A targets and the evaluation criteria of target enterprises,so as to ensure the successful implementation of merger and acquisition project.Firstly,this thesis studies the factors that will influence the decision-making of merger and acquisition.The merger and acquisition discussed in this thesis specifically refer to strategic mergers and acquisitions.The mergers and acquisitions enterprises are oriented by introducing advanced technology and improving their core competitiveness.In the case that Huayuan Holdings merged Runtianzhi,the main purpose of enterprise’s mergers and acquisitions is to transform from equipment manufacturer to intellectualized solution service provider,to gain more core competitiveness and business synergy.Then,this thesis studies the selection criteria and decision-making process of the candidate target enterprises.After the nature of candidate target enterprises,market value,core technology,core competence,industry status,market status,and key financial indicators were analyzed,the candidate target enterprises that best fit the requirements are selected among a number of candidate target enterprises by the threestep selection method,and then the candidate target enterprises can be comprehensively assessed by application of strategic analysis method,technical analysis method and financial analysis method.Thus we can obtain the best candidate.Thirdly,this thesis conducts an empirical study on the valuation of target enterprises.Because the target enterprises are all high-tech enterprises,their intangible value is more prominent.Firstly,the traditional discounted cash flow method is used to calculate its valuation,and then the intangible value of the target enterprise is identified and evaluated by real option method,finally obtain the overall valuation of the target enterprise.After the analysis and selection of target enterprises before merger and acquisition in the case,we can compared them with the actual merger and acquisition data.And,we believe that the analysis method and evaluation method in this thesis is effective,which can meet the needs of analysis and evaluation of merger and acquisition of hightech enterprises.