The Financial Reporting Blog

A weekly update on financial reporting topics curated by Mercer Capital’s Financial Reporting Valuation professionals


Allocating Purchase Price for a Pharma Transaction – Pfizer Acquires Medivation (Part 1)

In August 2016, Pfizer (“PFE”) announced it would acquire the biopharmaceutical company Medivation (“MDVN”) for $81.50 per share, or a total enterprise value of approximately $14 billion, in an all-cash deal. The transaction made headlines for the how the size of the deal escalated over a period of approximately six months prior to the PFE announcement, as well as the potential implications regarding the attractiveness of (relatively) smaller biopharmaceutical targets in an environment where larger deals face an inordinate amount of regulatory scrutiny.

Corporate Finance in 30 Minutes

Corporate finance does not need to be a mystery. In this whitepaper, we have distilled the fundamental principles of corporate finance into an accessible and non-technical primer. Structured around the three key decisions of capital structure, capital budgeting, and dividend policy, the guide is designed to assist directors and shareholders without a finance background to make relevant and meaningful contributions to the most consequential financial decisions all companies must make.

Fairness Considerations for Mergers of Equals

When asked about his view of a tie years before the NCAA instituted the playoff format in the 1990s, Coach Bear Bryant famously described the outcome as “kissing your sister.” If he were a portfolio manager holding a position in a company that entered into a merger of equals (MOE), his response might be the same.

PCAOB to Focus on M&A and Fair Value in 2016

In July 2016, the PCAOB issued a staff inspection brief to provide information about the plan, scope and objectives of PCAOB inspections in 2016 of registered audit firms and their audits of issuers. Translation: watch out for these potential landmines when preparing, auditing, or reviewing your firm’s financial statements.

Five Variations on a Theme: Analyzing Transaction Premium Data (Part 2)

Part 1 of this series offered an overview of observed transaction premium data (from the 2016 Mergerstat Review) for acquisitions of public companies. That post also deliberated on one of five common avenues to incremental economic benefits that motivate market participants to transact. Part 2 walks through the four remaining variations on the incremental economic benefits theme, and offers some concluding thoughts on how to incorporate this sort of analysis into fair value measurements.

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