DISCUSSION QUESTIONS quemmy at Turist Crneria that might be used to select a manufacture ng firmas tential acuisition candidate. A financial service rogy firm? .2 dentyhe native ways to make contact with a potential acqui tion tar- get. Why is i tal portant? Inder what circumstances migh a potential acquirer ma eitssentonblic? 13 What are afferences between to n sideration, total purchase prid enterprise valy and ne purchase price? How are these cent concepts used? 14 at is the perpose of the buyer's and the seller's pertom u e diligence? hvis preclosing integration nlanning important? 5.6 In a rush to complete its purchase of health software producer HBO, McKesson did not perform adequate due diligence but, rather, relied on representations and warranties in the agreement of sale and purchase. Within 6 months following closing, McKesson announced that it would have to reduce revenue by $327 million and net income by $191.5 million for the preceding 3 fiscal years to correct for accounting irregularities. The company's stock fell by 48%. If HBO's financial statements had been declared to be in accordance with GAAP, would McKesson have been justified in believing that HBO's revenue and profit figures were 100% accurate? Explain your answer. Fir e ction currently in the sour Speculate as to what the buyer ended to identify the tagget company as an atiyactive takeover candidate. Bespre 5. Freser userman manufacturer of dialysis equipment aca rii Pharmaceu- ticals pr $4.6 billion h eal includes an under which Freser tus would pay as mu h as $970 million in certain future financial targets. What is the purpde of the rout? Ho doesffect the buyer and the seller? 5. MACSOlle parties to the centract to deterineho will bear the risk adverse even etween the signing an agreement and losing. They are frequently n ated in dollar terms. How n ght MACs affect the egotiat i on of the W e agreem period between sugg au CIUS II. THE MERGERS AND ACQUISITIONS PROCESS DISCUSSION QUESTIONS quemmy at Turist Crneria that might be used to select a manufacture ng firmas tential acuisition candidate. A financial service rogy firm? .2 dentyhe native ways to make contact with a potential acqui tion tar- get. Why is i tal portant? Inder what circumstances migh a potential acquirer ma eitssentonblic? 13 What are afferences between to n sideration, total purchase prid enterprise valy and ne purchase price? How are these cent concepts used? 14 at is the perpose of the buyer's and the seller's pertom u e diligence? hvis preclosing integration nlanning important? 5.6 In a rush to complete its purchase of health software producer HBO, McKesson did not perform adequate due diligence but, rather, relied on representations and warranties in the agreement of sale and purchase. Within 6 months following closing, McKesson announced that it would have to reduce revenue by $327 million and net income by $191.5 million for the preceding 3 fiscal years to correct for accounting irregularities. The company's stock fell by 48%. If HBO's financial statements had been declared to be in accordance with GAAP, would McKesson have been justified in believing that HBO's revenue and profit figures were 100% accurate? Explain your answer. Fir e ction currently in the sour Speculate as to what the buyer ended to identify the tagget company as an atiyactive takeover candidate. Bespre 5. Freser userman manufacturer of dialysis equipment aca rii Pharmaceu- ticals pr $4.6 billion h eal includes an under which Freser tus would pay as mu h as $970 million in certain future financial targets. What is the purpde of the rout? Ho doesffect the buyer and the seller? 5. MACSOlle parties to the centract to deterineho will bear the risk adverse even etween the signing an agreement and losing. They are frequently n ated in dollar terms. How n ght MACs affect the egotiat i on of the W e agreem period between sugg au CIUS II. THE MERGERS AND ACQUISITIONS PROCESS