A Sustainability Plan for the Mitigation Strategies and Solutions for Global Warming

Global Warming (GW) is a term that connotes elevated temperatures of the globe at closer planes. This originates from the sun’s heat enclosed within the atmosphere.Advertising We will write a custom research paper sample on A Sustainability Plan for the Mitigation Strategies and Solutions for Global Warming specifically for you for only $16.05 $11/page Learn More It is notable that such a warming process appears to be escalating. Probably, changes appear negligible to many societies, but they will augment with time. Apparently, the next decades may witness elevated warming levels, upon comparison to the temperature in preceding years. Diverse segments of earth inhabitants and property drastically suffer from the predicaments of global warming. In order to address the repercussions of GW, it is necessary to initiate mitigation strategies. These strategies will augment people’s adjustment and solutions to GW consequences. Thus, this paper wil l design a sustainability plan for implementing mitigation tactic and solutions for GW. Detailed Description of the Problem The balance of input of energy into the earth and its eventual loss control the earth’s temperature. Some atmospheric gases named â€Å"Greenhouse Gases† (GHGs) avail greater controls to this balance (O’Hare, 2011). A fraction of solar radiation that reaches earth surface goes back to the environment. Similarly, land and surfaces of expansive waters also attract other components. This enables earth surface to augment in warmth thus emitting â€Å"long wave infrared radiation† back into the atmosphere (Luo, Behera, Masumoto et al., 2011). Certain GHGs traps this â€Å"long-wave radiation† making atmosphere warmer, which eventually causes GW (Luo, 2011). GHGs include â€Å"carbon dioxide, water vapor, ozone, methane, and nitrous oxide† which initiates the enclosing effect thus generating earth’s surface warming (Oà ¢â‚¬â„¢Hare, 2011). It is notable that carbon dioxide and methane emerge as the greatest victims causing GW. Nonliving and Living Factors that contribute to GW and Suffers its Consequences Carbon dioxide and methane escalate in the atmosphere because of human activities, necessitating making conclusions that human beings cause GW. These human activities include fossil fuels burning, together with clearing of forests for cultivation (O’Hare, 2011). The consequences of GW affect all living and lifeless things on the earth surface.Advertising Looking for research paper on environmental studies? Let's see if we can help you! Get your first paper with 15% OFF Learn More Escalation of sea capacities, recurrent extreme weather occurrences, melting ice, diseases emergence appear to affect human beings, animals, and plants. This happens due to losses of lives of living creatures, which apparently causes extinctions (O’Hare, 2011). The earth’s property also appears damaged after such occurrences. Conversely, GW also generates climate change, which contains diverse benefits including rainfall in certain regions. This escalates cultivation activities significantly thus improving food production. Positive or Negative Human Impacts It is notable that diverse human activities implemented to create wealth and augment food production generate higher levels of carbon dioxide and methane in the atmosphere. The activities include burning fossil energy and deforestation, which apparently deposits monumental quantities of carbon dioxide in the atmosphere (Metz, Davidson, Bosch et al., 2007). Similarly, massive implementation of animal farming activities also generates methane, which escapes. The two gases emerge as greatest victims of GW. This eventually causes GW because of the escalated warming of the atmosphere. These constitute negative human impacts because they escalate rates of GW. Evaluation of Current Sustainability Strategies and Solutio ns It is notable that current sustainability tactics and solutions for responding to GW entail mitigation. Furthermore, such tactics also entail adaptation. Mitigation connotes anthropogenic intercession to diminish sources of GHGs or escalate the gases uptake by sinks (Itol, 2010). It focuses on avoiding the extensive undesirable impacts of GW. Adaptation means regulations in usual or societies systems in reaction to real and likely GW stimuli or their consequences, which moderates sufferings or exploits favorable opportunities. Adaptation thus includes designed tactics to lessen unavoidable consequences of GW in both short term and the future. Current sustainability tactics and solutions link the mitigation of GW and adjustment to temperature alterations to attain a uniform feedback (Luo, 2011). The common goal entails weakening unwelcome consequences of GW. Certain consequences of GW also appear to have gained solutions developed for its mitigation. Apparently, communities implem ent such solutions.Advertising We will write a custom research paper sample on A Sustainability Plan for the Mitigation Strategies and Solutions for Global Warming specifically for you for only $16.05 $11/page Learn More The diverse mitigation and adjustment tactics for GW tend to focus on different segments of societies economies and activities. The mitigation measure for energy supply entails escalating availability and circulation efficiency, shifting of fuel use to clean energy (Metz et al., 2007). It also encourages utilization of renewable energy and implementing â€Å"carbon capture and storage† (CCS) thus hoarding carbon dioxide emanating from natural gas (Metz et al., 2007). Transport industry also manufactures fuel effective vehicles, hybrid cars, and vehicles utilizing cleaner diesel. Many strategies also entail shifting to rail transport, common transport means, cycling, and land use planning and walking. Many upcoming buildings imple ment energy efficient tactics (Metz et al., 2007). The industry segment also mitigates GW by implementing highly effective electrical equipment, energy recovery, resources reuse, and substitution. Further, they scheme for non carbon dioxide gas discharges as well as utilizing diverse progression exact technologies. The agriculture sector also utilizes sustainable strategies including escalated land manipulation tactics, which increases capacity of land to absorb more carbon dioxide (Metz et al., 2007). The tactics also diminishes quantity of GHGs discharged. Forest practices also mitigate GW by augmenting forestation, reducing deforestation and sustainable jungle management. Practices to utilize forest outputs as bio energy thus substituting fossil fuels also emerge. Waste management also entails utilizing landfill to enhance recovery of methane gas. Incineration practices tend to focus on recovering energy. Other mitigation measure involving wastes entail organizing used water curi ng, re use and diminishing waste production (Metz et al., 2007). ESD Sustainability Plan as a Mitigation Strategy and Solution for Global Warming The proposed sustainability plan for my community entails implementing â€Å"Education for Sustainable Development† (ESD) as a mitigation strategy and solution for GW (UNESCO, 2011).Advertising Looking for research paper on environmental studies? Let's see if we can help you! Get your first paper with 15% OFF Learn More Completion of ESD will employ the â€Å"United Nations Decade of Education for Sustainable Development† (DESD) guidelines proclaimed in 2002 (UNESCO, 2011). ESD requires a multidisciplinary approach in the implementation of programs designed to realize its goals. However, this proposed ESD plan will focus on dispensing sustainability knowledge to youngsters in the neighboring schools. This will contain youngster’s oriented practical activities, plays, and presentations. The execution of these will significantly escalates their understanding of sustainability issues with a focus on practicable activities. This potential enhances youngster’s capability to implement diverse activities within their households and at school to contribute to attaining sustainability. Benefits and Challenges of the ESD Plan The benefit of this proposed ESD plan for mitigating and availing solutions to GW matches its necessity. The youngsters will gain knowledge into diverse sustainabil ity issues affecting communities at international scales. This will enhance their global thinking of ecological predicaments facilitated by human activities. They will gain knowledge for acting locally to contribute to attaining sustainability. This will originate from dispensing relevant ideas to the youngsters on diverse things. Youngsters could implement such ideas at their households and schools to achieve sustainability. The youngsters also gain from an enjoyable learning, which focus on relevant issues outside classrooms. Further, the youngsters will appreciate local predicaments with international roots and design tactics of solving their local ones. The execution of this sustainability plan encounters potential challenges of schools refusing to permit the implementation team to access their institutions. Some institutions will apparently refuse to avail students for this course. Further, the execution of this sustainability plan will also encounter financial challenges. It i s notable that finances will facilitate movement of the execution team among diverse schools. Further, it will avail necessary stationery and equipment for the successful implementation of the plan. Required Government, Societal, And Global Support This sustainability plan implementation necessitates certain level of support from diverse societal segments. The local administration will apparently support in the implementation by availing necessary permits and authorization to for team identification while they visit institutions. The probable support availed by the local society will entail allowing their youngsters to implement diverse sustainability practices learned within their households and schools. Further, the society will also avail youngsters and may accompany them for ESD learning sessions. Relevant global organizations will support the sustainability plan implementation by availing various learning materials and financial support. ESD Plan Guidelines The implementation o f the proposed sustainability plan will occur over a three-year period with possible extensions. The team will implement this plan in twenty institutions within the locality. Further, participants will agree on implementing diverse sustainability practices in their households and schools. After its successful implementation, the team will award outstanding participants. Furthermore, various support segments will avail their assistance towards the ESD plan implementation for smooth execution of the components. The overall activities for this proposed sustainability plan would occur under the following timelines. A Table Outlining the ESD Plan activities Implementation over Three Years Period Component Action Steps Timelines Gathering ESD plan development and implementation team This will entail informing close friends about my ESD plan and recruiting individuals willing to form the team 1st and 2nd month Development of the mission and vision of the plan This requires deliberat ing over several possible mission and vision goals and settling on the ones most fitting for the ESD plan 3rd month Identify the likely institutions and grade of students for implementation of the plan and carry out a reconnaissance study This will entail team members suggesting probable schools where the implementation of the plan will occur. It also requires members to suggest the grade of students the plan will target. After attaining agreements on these, the team will engage in a reconnaissance study of the identified schools. 3th month Development of the ESD plan ESD plan development by the team will occur. This will incorporate the needs identified in the visited institutions 4th month Seeking relevant support The team will then embark on seeking relevant support from the local administration, society and global organizations 4th month Mailing letters for official request to implement ESD in the identified schools and to identified support groups for official ceremony to launch the plan The team will design and mail letters for official request to the schools to permit it implement ESD. Similarly, support segments identified will also obtain official communications inviting them for the launch of the plan in any determined school 6th month Launch of the plan The team will launch the plan outlining its diverse components and implementation procedure. The team will also explain the necessity and expectations of the plan 7th month Implementation of the ESD plan The team will visit all the twenty schools and implement the diverse components of the plan. These will include sharing knowledge with the students, engaging in practicals, and formulating plays together with students. It will also entail advising students to implement learned sustainability issues at their households and schools and informing them that outstanding participants will gain awards. 7th – 32nd month Monitoring and Evaluation Monitoring and evaluation for the ESD plan implementation will continue from the beginning. However, in these months the team will embark on monitoring and appraising the student’s application of sustainability practices. 33rd -34th month Report writing The team will utilize insights and feedback obtained from monitoring to develop a report of the ESD plan implementation process 35th month Plan implementation closure ceremony The team will organize this ceremony in any identified school to release the plan implementation report to participants and support segments. Outstanding participating schools and students will be manifest. Support segments will also avail their insights of the plan and comment on its closure or extension. The team will also give comments on their experiences while implementing the plan and announce the program closure or extension. 36th month Source: Corporation for National Community Service. (n.d.) Conclusion The ESD sustainability plan appeared necessary as a mitigation strategy and solution for GW. Its implementation adhered to the United Nations DESD thus attaining its objectives. The plan avails diverse benefits for participating schools and students. Participants gained from knowledge sharing as regards to sustainability predicaments occurring internationally and locally. This enhanced their appreciation of such predicaments thus implementing learned issues and practicable activities to solve the ones observable in their localities. Furthermore, the implementation progression escalated enjoyable learning and gaining hands on experience for the participants. Implemented over a three-year period, the ESD plan emerged as a sustainable and practicable mitigation measure for GW. It is notable to comment that the plan encountered diverse challenges ranging from authorities refusal to avail permission to logistical predicaments. Most importantly, the ESD plan successfully attained its projected objectives. The overwhelming success of this plan necessitated calls f or extension of its implementation. References Corporation for National Community Service. (n.d.). Sample Sustainability Plan. In Toolkit for program sustainability, capacity building, and volunteer recruitment/management (Section 4). Web. Itol, A., Kawamiya, M. (2010). Potential Impact of Ocean Ecosystem Changes Due to Global Warming on Marine Organic Carbon Aerosols. Global Biogeochemical Cycles, 24, 1012-1021. Luo, J., Behera, S., Masumoto, Y. Yamagata, T. (2011). Impact of Global Ocean Surface Warming on Seasonal-to-Inter Annual Climate Prediction. Journal of Climate, 24(6), 1626-1646. Metz, B., Davidson, O., Bosch, P., Dave, R. Meyer, L. (2007). Climate Change 2007: Mitigation of Climate Change, Contributions of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, 2007. Cambridge: Cambridge University Press. O’Hare, G. (2011). Updating our Understanding of Climate Change in the North Atlantic: The Role of Global Warming and the Gulf Stream. Geography, 96(1), 5-16. UNESCO. (2011). Education for Sustainable Development. Web. This research paper on A Sustainability Plan for the Mitigation Strategies and Solutions for Global Warming was written and submitted by user PhilCoulson to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

30 Archaic Adjectives and Adverbs

30 Archaic Adjectives and Adverbs 30 Archaic Adjectives and Adverbs 30 Archaic Adjectives and Adverbs By Mark Nichol The words below are either obsolete, archaic, or old-fashioned, and though those in the latter category can still be found in modern writing, use all with caution. Sparing use keeps these words alive and adds a whimsical or quaint note, but too frequent recourse to such antiquities will have you sounding like a Renaissance Faire refugee. (Most are adjectives or adverbs or both; some can function as other parts of speech as well, as indicated.) 1. Anon (adv.): soon, or later (â€Å"They will arrive anon†; â€Å"I will reveal more anon†) 2. Aright (adv.): correctly (â€Å"Did I hear aright?†) 3. Athwart (adj., prep.): across (â€Å"The locked chest lay athwart the planks†) 4. Belike (adv.): probably (â€Å"Belike we are more similar than you think†) 5. Enow (adj., adv.): enough (â€Å"If I had loved enow, I would be a happier man†) 6. Fain (adj., adv.): willing, compelled, inclined, pleased (â€Å"Fain am I to hear you sing†) 7. Forsooth (adv.): indeed (â€Å"Forsooth, I do believe you envy him†) 8. Forthwith (adv.): immediately (â€Å"Carry this message forthwith†) 9. Froward (adj.): contrary, adverse (â€Å"His horse was froward, and threw him when he set his spurs†) 10. Heretofore (adv.): up to this time (â€Å"Heretofore, I had not believed it possible†) 11. Hither (adj., adv.): to this place (â€Å"Come hither when you are able†) 12. Hitherto: see heretofore 13. Lief (adj., adv.): beloved (â€Å"You are my lief friend†); willing (â€Å"I would as lief be beside you now†) 14. Mayhap (adv.): perhaps (â€Å"Mayhap we shall see them tomorrow†) 15. Meet (adv.): appropriate (â€Å"It is meet that you do so†) 16. Nary (adj.): not any or not one (â€Å"Nary a sign have I seen of him†) 17. Natheless (adv.): nevertheless (â€Å"Though it is dangerous, natheless will I go) 18. Needs (adv.): necessarily (â€Å"I must needs be heard so that all shall know†) 19. Nigh (adj., adv.; prep.): near, nearly, direct (â€Å"Those who pursue are nigh upon us†) 20. Peradventure (adj., adv., prep.): see mayhap (also n.: a doubt or chance) 21. Posthaste (adj., adv., n.): immediate (â€Å"Your posthaste reply is appreciated†); as quickly as possible (â€Å"We will arrive posthaste†) 22. Puissant (adj.): powerful (â€Å"She is a puissant adversary†) 23. Sith (adv.): since (â€Å"Sith that time, I have wept often over the memory†) 24. Strait (adj., adv.): narrow, or strict or rigorous (â€Å"I would have you be strait in your habits†) 25. Thither (adj., adv.): there, on the other or farther side (â€Å"Our host took us thither†; â€Å"What you seek is in the thither valley†) 26. Verily (adv.): certainly, truly, with confidence (â€Å"Verily, I did see it with my own eyes†) 27. Whereof (adv., conj.): of what (â€Å"Whereof have you seen in the world?†) 28. Withal (adv., prep.): besides, nevertheless (â€Å"Though you may be right, I withal must see for myself†) 29. Yare (adj.): agile, handy, ready (â€Å"She’s a yare vessel, all right†) 30. Yon (adj., adv., pron.): over there (â€Å"I ride to yon village†; â€Å"What do you see yon?†) Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Vocabulary category, check our popular posts, or choose a related post below:10 Grammar Mistakes You Should AvoidBetween vs. In BetweenWhat the heck are "learnings"?

Mis 2200 Essay Example | Topics and Well Written Essays - 250 words - 1

Mis 2200 - Essay Example One should understand this key element of the group’s makeup when outlining the mode and content of one’s presentation. Unlike a standard business audience that often contains employees and business representatives united by common business objectives and appropriate knowledge and experience of the presentation topic, the goal of completing the course is often the common denominator with the classroom audience. For the classroom audience, technical jargon may not be appropriate, and the level of detail presented should be custom-tailored to accommodate the differences in knowledge of the audience. Additionally, as with any audience, the classroom audience appreciates clarity and brevity. Often, a number of students deliver presentations during one class. The ability to communicate in a clear and concise manner when presenting can add impact and interest for the audience. Conversely, presenters who ramble and provide extraneous detail can make a presentation boring and ponderous. Like knowing the audience, the appropriate level of detail presented in a clear and concise manner is critical to delivering a memorable and insightful message. Skills applied in the classroom translate to any presentation setting, and can be a critical part of success in the business world. Particularly in a classroom setting, one should know one’s audience and understand the level detail needed for effective delivery of the material. Clarity and conciseness are vital to successful presentation and the presenter should tailor the delivery of the message to the unique audience in attendance as much as

History Analysis Paper Essay Example | Topics and Well Written Essays - 750 words

History Analysis Paper - Essay Example The cold war politics in the Truman years Lessons according to Marshall The Truman years characterized the crazy periods of war and peace interchanges amongst nations as the United States of America, the Soviet Union, Germany, Japan and other European nations. This period encompasses the time after the world war two. Various occurrences of war, victories and loss of life emanated during this time which made history of all ages in the world. This is according to general Marshall. According to general Marshall, one of the renowned military leaders in the states, the American society got prepared enough for any further attacks. He authored a systematic military alliance that could stand any strength of attack from foreign nations. This reading proposes that modern war fare necessitated for careful and skillful military planning. The United States of America got prepared for any further internal catastrophe as a result of the Truman time. This preparation is a reflection of today’ s military actions in the US and other nations in the world, as evidenced by the retiring Eisenhower’s message during the farewell. Moreover, this is evidenced by the class films worked on during the week. According to the author of this reading, maximum preparedness for internal protection was outlaid by George Washington during his time of reign. As a way of adoration to his nation, George strategized and revealed a long tem overdue plan on protection against external attacks. With this, we are able to figure out that military actions were a plan of different nations, and resulted in conceptual counters on the same. Germany is another nation that was sick of military protection during this time. This provides a lesson to the US state of force. With negligence of the American troops to fight in protection of their nation, the German armies were in operation sweeping the entire Europe. It took the remedies of errors made by the armies to protect America. The nation had to get involved in the French war. Marshalll asserts that he had to stand out and persuade the reigning authority on the need to establish an everlasting defense policy in the nation. He perceived this as to save the nation of its myriad wealth which was going waste. With Hitler forging several wars with the American nation, the Great Britain had to stand in between them. But one notion has since pushed America to settle for an internal peace and protection. Considering that it is one of the stronger nations, it is concerned with assigning peace to the entire nations of the world. In this case, we see America standing out as one of the forces of peace during the Truman times. Therefore, according to the author, a nation as the US has all the capacity to prepare for and against war. Technology and war As evidenced during the Truman times, international war is mostly won with skillful utilization of military machines. This is reflective with the American soldiers during this time. According to the author, men are needed in war same to technology. For instance, the American success in air and sea fights centrally dwelt on technology. Apart from relying on me alone, the author empresses that technology is quite subtle to any success in the modern warfare. Moreover, technology is quite contributory to the entire success of national economy. Men are needed as much as technology is important. The farewell address of 1961 This was a farewell that warned the US on the impending military industrial complex. President

MidTerm American Presidency Term Paper Example | Topics and Well Written Essays - 250 words

MidTerm American Presidency - Term Paper Example In conclusion, the presidential powers should be used for persuasion and bargain purposes rather than command. According to him, there are only two types of presidential powers, which are to persuade and command, with the command acting as a dictatorial aspect whereas the persuasive type of power is for effective influencing (Neustadt 56). In order for one to maintain the power, one should engage all concerned parties in the governance. However, such powers also have a crucial barrier, which is the president making of personal decisions without engaging others. Currently, President John F. Kennedy is one who applied the shared presidential power other than its separation. This engages a number of people on board in the decision making process. President Bill Clinton had been worst in the application of Neustadt’s theory of presidential powers. Based on my opinion, Neustadt’s theory of presidential powers is effective in ensuring the shared delegation of duties, which brings all individuals on board in effective management. Despite the strengths associated with Neustadt’s theory of presidential powers, Skowronek tends to be of the contrary opinion in which he states that the presidential powers should involve the utilization of informal authority in ensuring that things are done in the most effective way as a contribution of modernity (Skowronek 318). On the two theories, the major difference is because according to Neustadt’s theory of presidential powers, power is for persuasion and not command while according to Skowronek, it is through the presidential command that things are

Concepts of Mergers and Acquisitions

Concepts of Mergers and Acquisitions MA CONCEPTS Introduction â€Å"The phrase Mergers and Acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying and selling and combining of different companies that can aid, finance or help a growing company in a given industry grow rapidly without having to create another business entity† The above sums up in a nutshell the concept of mergers and acquisitions. There are multiple reasons for companies to get into MA activity whether to expand into a new market or geography, to gain market share in a current market, to overcome competition or for regulatory reasons as some governments make a tie up mandatory to operate in their local economy. However it is essential to mention that in the current economic scenario MA has become an essential tool for companies to expand and grow, as successful MA strategy can be a differentiating factor for successful organization. The words and Mergers and Acquisitions are quite often used interchangeably in the current corporate world and hence can be seen in the project as well. Here is an attempt to list out some salient features which differentiate between the terms Mergers and Acquisitions. Merger A Merger can be descried as a combination of two companies into one larger company; such activities are normally voluntary in nature and involve a stock swap or cash payment to the target organization. Stock swaps allow the shareholders of both companies to share the risk involved in the deal. A merger normally results in a new company with a new brand and a new company name being created. Oxford Dictionary of Business defines mergers as â€Å"A combination of two or more businesses on an equal footing that results in the creation of a new reporting entity formed from the combining businesses. The shareholders of the combining entities mutually share the risks and rewards of the new entity and no one party to the merger obtains control over another. Acquisition Acquisitions or takeover are different from Mergers. In the case of an acquisition a company unilaterally relinquishes its independence and adopts to the acquiring firms plans. As a legal point of view the target company ceases to exist as the buyer â€Å"swallows† the business. Acquisitions have the following characteristics They are a part of a well-considered company development plan It is a unilateral process Top management structure will have fewer problems Contractual regulations are simpler Time taken for an acquisition is normally shorter than a merger. However it is essential to mention here that whether a purchase is to be considered as merger or an acquisition actually depends on the whether the purchase is friendly or hostile or in the manner it is announced. The real difference hence lies in the way it is communicated and the way it is received by the shareholders, directors and employees of the target company. History of MA Mergers and Acquisition movements were normally defined and associated with the behavior of US organizations. Various authors have tried to classify the merger movements into wave. The most prominent was Weston who in 1953 described three major periods of merger movements while studying the US business behavior. Merger waves are a very generic way to describe the predominant strategy that was being adopted by organizations in that era. This has been interpreted by the different authors in different ways depending on how they have perceived by them. However it would be wrong to consider that all organizations followed the same strategy as described in the various. The start or the first wave of the Merger movement is said to be have been post the Sherman Act in 1890. Prior to 1890 there was a predominance of the polypoly market structure, this was reduced post 1890 and partial monopolies started increasing. The economic history has been divided into Merger Waves based on the merger activities in the business world as: Period Name Facet 1889 1904 First Wave Horizontal mergers 1916 1929 Second Wave Vertical mergers 1965 1989 Third Wave Diversified conglomerate mergers 1992 1998 Fourth Wave Hostile takeovers; Corporate Raiding 2000 Fifth Wave Cross-border mergers The Great Merger Movement was primarily a US business phenomenon from 1895 to 1905. It is said that during this time 1800 of small firms disappeared into consolidations with similar firms to form large, powerful institutions that dominated their markets. The relaxation of corporate laws in the United States helped the mergers, transportation and communication networks were developed which helped achieved economies of size. The second wave (1916 to 1929) saw even greater activity in mergers. The motive behind these mergers was vertical integrations. Organizations tried to achieve technical gains and to avoid their dependence on other firms for raw materials. The third wave saw the large conglomerates looking at diversification in the 60s. the process actually reached its zenith during the merge wave and was carried to its logical extreme by the conglomerate firms that rose to prominence during that time. The fourth wave in 90s saw increase in hostile takeovers and corporate raiding by the large firms. This was a wave during which vulnerable companies were grabbed up by the larger firms. The fifth wave has been categorized as starting from the year 2000 onwards and has seen a trend of increase in Cross border acquisitions. The rise of globalization has seen increased the market for cross border MA. This rapid increase has taken many MA firms by surprise as most of them never used to consider this due to the complexity involved in cross border MA. The success of these acquisitions was also limited and we saw a vast majority of them failing. Even then in 1997 alone there were over 2300 cross border acquisition worth a total of approximately $298 Million. Source: Boston Consulting Group Research Report â€Å" The Brave New World of MA-How to Create value from MA†, July 2007 Types of Mergers and Acquisitions There are various types of mergers and acquisitions depending on the type of the business structure. The classification can be based on the type of companies merging or by the way the MA deal is being financed. Here is some type of mergers on the basis of the relationship between the two companies that are merging: Horizontal Merger- This type or a merger is between two companies that share the same product line and markets and are in direct competition with each other Vertical Merger This is between a customer and company of between a supplier and a company Market Extension Merger This between two companies that sell the same products in different geographies or markets Product Extension Merger This is between two companies that are selling different but related products in the same market. Circular Merger A circular merger is very similar to a product extension merger however in this case the products being sold are completely unrelated. The merger brings in benefits by utilizing the same channels for marketing these unrelated products, allowing shared dealerships. An example of this kind of a merger is of McLeod Russel (A Team company) with Eveready Industries ( A batteries company) in 1997. McLeod Russel however was de-merged from Eveready in 2005. Conglomeration This type of a merger is between two companies that have no common business areas. Mergers can also be classified depending on how the merger is being financed as described below Purchase Mergers This kind of a merger occurs when a company purchases another. The purchase is made through cash or through the issue of a debt instrument. Consolidation Mergers In this type of a merger a new company is formed and both the companies are bought and combined under the new entity. Type of acquisitions can be described as below Amalgamation In this type of an acquisition a new corporation is created by uniting the companies voluntarily. Acquisition/Takeover In this form one company acquires another companies total or controlling interest. The acquired company either operates as a subsidiary or can be liquidated completely. Sale of Assets A company can sell off all its assets to another and cease to exist. Holding Company Acquisition This involves the acquisition of either the total or majority of a firms stock by a company. The purpose of this form is mainly to gain management control of other companies Reverse Merger In this form of an acquisition a private company with strong prospects buys a publicly listed shell company, usually one with no business or limited assets. This helps the private company to get publicly listed in a short span of time. All mergers though have one common goal and that is to create a synergy between two companies which makes the value of the combined companies to be greater than the sum of the two companies MA Process MA process can be laid down in 3 basic phases First Phase Start with an Offer The acquiring firm once decides that they want to do a merger of acquisition, they start with an offer. The acquiring company starts working with financial advisors and investment bankers to initiate contact with the target company. The acquiring must have a strategy for a merger programme, formulated by company management and approved by the director and majority stockholders. The acquiring company also at this point does a soft due diligence with the help of publicly available data and financial advisors. The purpose of this is to arrive at an overall price that the acquiring company is willing to pay for its target in cash, shares or both. Second Phase Targets Response Once the offer has been made the target company can do one of several things mentioned below Accept the offer If the target companies top management and shareholders are happy with the offer they can simply accept the offer and go ahead with the deal. Attempt to Negotiate   If the target company management and shareholders are not satisfied with the offer they might try and work out more agreeable terms with the acquiring company. Since a lot is stake for the management of the target i.e. their jobs in particular, they might want to work out better deal to keep their jobs or leave with a big compensations package. Target companies which are highly sought after with multiple bidders would obviously have a better chance of negotiating a sweeter deal. Even manager who are crucial to the operation of an organization have a better chance of success into negotiating a good deal for them. Execute a Poison Pill or similar Hostile Takeover Defense A poison pill can be initiated by a target company if it observers a potential hostile suitor acquiring a predetermined percentage of Target company stock. To execute its defense, the target company grants all shareholders except the acquiring company options to buy additional stock at a dramatic discount. This dilutes the acquiring companys share and thwarts the potential hostile takeover attempt.  · Find a White Knight In this alternative a target company seeks out a friendlier company as a potential acquiring company. The friendlier company would offer an equal or higher price with better terms as compared to a hostile takeover bid. Third Phase or Closing the Deal Once the target company accepts the offer and all the regulatory requirements are met then the deal would be executed. The acquiring company will them pay for the target companies shares with cash, stock or both. A cash-for-stock transaction is fairly straightforward: target company shareholders receive a cash payment for each share purchased. When a company is purchased with stock, new shares from the acquiring companysstock are issued directly to the target companys shareholders, or the new shares are sent to a broker who manages them for target company shareholders GROWTH STRATEGIES Concept of Growth Growth in firms can be looked at by two broad views: organic growth, or inorganic growth. Organic growth is achieved through mainly internal expansion while inorganic growth is achieved through external expansion, i.e. through consolidations, acquisitions and mergers. Growth is something for which most companies, large or small, strive. Small firms want to get big, big firms want to get bigger. As observed by Philip B. Crosby, author of The Eternally Successful Organization, if for no other reason than to accommodate the increased expenses that develop over the years. Inflation also raises the cost of everything, and retaliatory price increases are not always possible. Salaries rise as employees gain seniority. The costs of benefits rise because of their very structure, and it is difficult to take any back, particularly if the enterprise is profitable. Therefore cost eliminations and profit improvement must be conducted on a continuing basis, and the revenues of the organization must continue to increase in order to broaden the base. Most firms, of course, desire growth in order to prosper, not just to survive. Organizational growth, however, means different things to different organizations. Indeed, there are many parameters a company can select to measure its growth. The most meaningful yardstick is one that shows progress with respect to an organizations stated goals. The ultimate goal of most companies is profit, so net profit, revenue, and other financial data are often utilized as bottom-line indications of growth. Other business owners, meanwhile, may use sales figures, number of employees, physical expansion, or other criteria to judge organizational growth. Companies which are run by a product minded entrepreneur are more concerned with the growth and profitability of a firm as an organization for the production of goods and services. While companies run by empire builders type of entrepreneurs are continuously looking at expanding the scope of the enterprise. Empire builders are not satisfied are not sa tisfied with product improvement or maintaining competitive edge In terms of access to finance there are broadly five growth stages in a companys lifespan: inception, organic growth, purchased, IPO and Beyond IPO as shown in the figure below. Each stage has its own characteristics, risks and potential financial sources. Organic Growth without MA In Organic growth, growth depends on the ability to avail the available opportunities and existing resources in a more efficient way. The extent of growth of a firm is actually determined by the ability of managers, product or market factors. There is no limit to the absolute size of the firm keeping in mind the assumption that there is no fixity of capital, labor and management and the firm is capable of acquiring these resources at a price. In addition it is also assumed that there are opportunities in the economy for investments. The economies available within the firm (such as excess productive resources or managerial capabilities) disappear after the expansion is completed as they get utilized in a new activity. This means that it is only an â€Å"entry advantage†. However the firm may have these advantages in its new operations, often set up as new subsidiaries or divisions, which may grow in response to the economies in the same manner as the rest of the firm. New operations may later be spun off from the original firm without any loss of efficiency. Further, both the original and the spun off firms will have some unused productive resources which can then be used to develop new activities Inorganic growth through MA The inorganic growth strategy is dependent on MA. The idea of acquisition is that it accelerates the business model, giving it greater impetus than organic growth. Because acquisition gives the business what it cannot get quickly or incrementally. It may be a joint venture an agreement that gives both parties something they want that the other has. Acquisition targets can include both complementary and competitive businesses complementary when the target can give something an acquirer needs or competitive when the target can stop someone else having what the acquirer wants. The risks in growth through acquisitions are significant, but they can be contained through planning and due diligence. The primary risk is integration: post the acquisition is completed the new arrangements have to work and people who were not party to the negotiation have to work together. The same goes for systems and expectations as different business would have grown in different ways. A consistent culture is laudable but a wholly consistent culture will be impossible. Add regional diversity to this and the risk would become even higher. Motivations for MA Mergers and acquisitions can be motivated by either the share-holder wealth maximizing approach or the widening share ownership. The primary objectives of MA activities are diversifications, market expansion, improving competitive position and depression immunity. Given these basic objectives a different rationale can be assigned at both individual and collective levels. From the standpoint of shareholders Investment made by shareholders in the companies subject to merger should enhance in value. The sale of shares from one companys shareholders to another and holding investment in shares should give rise to greater values i.e. the opportunity gains in alternative investments. Shareholders may gain from merger in different ways viz. from the gains and achievements of the company i.e. through Realization of monopoly profits; Economies of scales; Diversification of product line; Acquisition of human assets and other resources not available otherwise; Better investment opportunity in combinations. One or more features would generally be available in each merger where shareholders may have attraction and favor merger. From the standpoint of managers Managers are concerned with improving operations of the company, managing the affairs of the company effectively for all round gains and growth of the company which will provide them better deals in raising their status, perks and fringe benefits. Mergers where all these things are the guaranteed outcome get support from the managers. At the same time, where managers have fear of displacement at the hands of new management in amalgamated company and also resultant depreciation from the merger then support from them becomes difficult. Promoters gains Mergers do offer to company promoters the advantage of increasing the size of their company and the financial structure and strength. They can convert a closely held and private limited company into a public company without contributing much wealth and without losing control. Benefits to general public Impact of mergers on general public could be viewed as aspect of benefits and costs to: Consumer of the product or services; Workers of the companies under combination; General public affected in general having not been user or consumer or the worker in the companies under merger plan. VALUATION OF TARGET COMPANIES Valuation of target companies is an essential step in the MA process. Due Diligence Due Diligence of a company; answers the question of whether a deal is being done at the right time at the right price for the right reasons. It involves an investigation into the affairs of an entity and results in the production of a report detailing relevant data and points. The investigation is performed prior to the businesss acquisition, flotation, restructuring or other transactions Due Diligence is performed by many advisors on the team. For example there may be a separate legal due diligence, financial due diligence, tax due diligence, environmental due diligence, commercial due diligence, and information technology due diligence. Financial due diligence is a vital part of the MA process. Often a problem in the financial due diligence raises point to be dealt by other areas as well, for example a financial due diligence may uncover an unusual lease obligation which then feeds into the legal due diligence. What a due diligence involves Each MA transaction is unique in its own sense hence the scope and extent of a due diligence process needs to be tailored to fit the needs of the buyer. However broadly it should cover the following aspects: The history and commercial activities of the business The organizational structure and employees Employee benefits and labor matters Its accounting policies The information systems A detailed review of financial statements A review of the financial projections Anything else the team may uncover that is relevant for the transaction Methods of Valuation The valuation of a target company normally depends on a lot of factors, it is not sufficient to evaluate the financial aspect alone. This is possible through a valuation of the 5 Ps which are: Personnel  ­- senior management of the target company play an important role in an acquisition. The acquiring firm considers the motivation, energy and intelligence levels of the existing personnel before taking them on. Product Proprietary products of a Target company increase the value of the company. Plant The plant capacity and condition of equipments also affect the valuation of a company. Potential The potential of a firms growth as compared to the industry is also a factor in its valuation Profit The declared profits of the firm is the basis of determining price. It is normally considered easier to evaluate public limited since most of the above data is publicly available in their annually published reports. In the case of a Private company it is a little more challenging to get the same information and the Acquiring company has to depend on a proper due diligence process to complete its valuation. Financial Valuation Financial valuation should answer the simple, but vital, question â€Å"What is something worth?† The analysis of target is hence based on either current projections or of the future. The process of valuations differ substantially for a listed and unlisted companies Many types of valuation metrics are used, involving several sets of metrics. On of the most common is the standard P/E ration (Price to earnings ratio) however some of the other metrics include assets value, capitalized earnings, market value, investment value, book value, costs basis valuation, enterprise value and some combined methods as well. P/E Ratio and Market Price For an unlisted company the P/E ratio of a comparable listed company is referred to and discounted based on the voting rights in the company. For listed companies the modes of valuation can be based on either earnings or assets. The market price of shares reflects the earnings per share (EPS). P/E ratio Calculated as: The P/E ratio is the current price of shares divided by the EPS. The higher the P/E ratio the higher are the future earnings expectation The P/E multiple is calculated as the multiple of net profit used to compute the companys purchase price. For example, an investor attempting to recover his initial investment in 10 years would have to earn an after-tax return of 10% on investment, plus adjustment for discounted cash flow and inflation. Discounted Cash Flow (DCF) analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value. DCF is calculated as: Assets Value Tangible assets, such as land and buildings, and intangible assets are assessed as per existing business practices. Goodwill is based on the companys excess earning power for certain number of years. The asset basis valuation is either on the fair value or the open market value. The dividend approach and the super profit approach can also be used for asset valuation. In the dividend, the present share prices are taken as the values of future dividends. While the super profit approach expects to get more value for a firm in addition to the value of the net assets. Capitalized Earnings This method is based on the rate of return on the capital employed Market Value This is on the basis of quoted share values at the stock exchange. Investment Value This is the cost of establishing an enterprise such as the target company and the interest on the same. Book Value This is the secondary factor in valuations and takes into account the total worth of the assets after depreciation. If the P/E multiplier is less than the book value then the book value has to be adjusted to reflect the true value. It takes into account the present net value of the real estate, machinery and equipment. Sometimes the book value may be understated in times of inflation and overstated during depression. Cost Basis Valuation This is cost minus depreciation. Intangible assets are not taken into account. Reproduction Cost This is the current cost of replacement of properties with similar design and material. Substitution Cost Substitution cost is the cost of construction of the same utility and capacity. Enterprise Value The valuation of a company is based on the Enterprise Value (EV) and its ratio to the companys sales and operating profit (PBIDT Profit before interest, depreciation and tax). Enterprise Value is calculated as: A = Market Capitalization of Stock + Total Debt on Companys books B = Investments + Cash EV = (B A) Accounting Methods The method accounting also has a significant impact on the valuation and price the seller will receive. The acquiring firm can use two principal accounting methods for valuations, they can either use the pooling of interests method or the purchase method. The main difference between them is the value that the combined firms balance sheet places on the assets of the acquired firm, as well as the depreciation allowances and charges against income following the merger. Pooling of Interests Method The pooling of interests method assumes that the transaction is simply an exchange of equity securities. Therefore, the capital stock account of the target firm is eliminated, and the acquirer issues new stock to replace it. The two firms assets and liabilities are combined at their historical book values as of the acquisition date. The end result of a pooling of interests transaction is that the total assets of the combined firm are equal to the sum of the assets of the individual firms. No goodwill is generated, and there are no charges against earnings. A tax-free acquisition would normally be reported as a pooling of interests. Purchase Method   In this method, assets and liabilities are shown on the merged firms books at their market (not book) values as of the acquisition date. This method is based on the idea that the resulting values should reflect the market values established during the bargaining process. The total liabilities of the combined firm equal the sum of the two firms individual liabilities. The equity of the acquiring firm is increased by the amount of the purchase price. Mark Up Pricing/ Premium Markup pricing or premium is the percentage difference between the trading price of the target companies stock before the announcement of acquisition and the price per share paid by the acquiring firm. Bidding firms pay large premiums to acquire control of exchange-listed target firms. Normally premiums include pre-bid run up in the target firms stock price as part of the control premium paid by the winning bidders. The valuations by the bidder and the target depend on the information each party has at the time of the negotiation. Mark Up or premium is partly decided on the basis of the relationship pattern of the acquiring firm. The pattern in some cases is that if interlocking directorship among firms. Most firms have stable and long standing relationships with professionals such as attorneys, investment bankers and accountants. These are likely to have similar effects as to interlock directorships. Managers take advice from both their interlock partners and professional firms when deciding how much to pay. Financing an MA Organizations use various methods for financing an MA deal. Often combinations of the below mentioned methods: Cash Cash payments. These are normally preferred since the organization does not have to dilute equity and there will be no change in the number of shares outstanding. Also cash transactions save time and cash can be re-invested at the face value. Financing Financing capital may be borrowed from banks or raised from issue of bonds. Acquisitions that are financed through debt are called as leveraged buyouts if they take the target private, and the debt will often be moved down into the balance sheet of the acquired company. Hybrids An acquisition can involve a combination of cash and debt or of cash and stock of the purchasing entity. POST ACQUISITION INTEGRATION After the acquisition is completed, the acquired company needs to be integrated with the acquiring company. The process of integration actually needs to be planned during the acquisition itself to ensure that the company integrates smoothly. The success of integration also depends on the managers who are responsible for the implementation. Planning The acquiring company needs to plan the post acquisition integration period. IN the initial period the target company is more receptive to drastic changes to make the company viable. Some of the basic approaches are as follows Adapting a program This should be completely aligned with the companies goals and objectives of the company and should also take into account the limitations of the company. Effective organization and leadership structure The integration process involves creating a group which focuses on creating value through specific activities and actions. A true partnership would mean involving the senior leadership of the acquired company as well in this strategic group. Minimize post acquisition exodus of critical resources It is critical to have a preventing plan in place to minimize the damage that maybe caused to the new enterprise. Any loss of critical things like market standing, key employees, brand has to be avoided. Employee issues The empl Concepts of Mergers and Acquisitions Concepts of Mergers and Acquisitions MA CONCEPTS Introduction â€Å"The phrase Mergers and Acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying and selling and combining of different companies that can aid, finance or help a growing company in a given industry grow rapidly without having to create another business entity† The above sums up in a nutshell the concept of mergers and acquisitions. There are multiple reasons for companies to get into MA activity whether to expand into a new market or geography, to gain market share in a current market, to overcome competition or for regulatory reasons as some governments make a tie up mandatory to operate in their local economy. However it is essential to mention that in the current economic scenario MA has become an essential tool for companies to expand and grow, as successful MA strategy can be a differentiating factor for successful organization. The words and Mergers and Acquisitions are quite often used interchangeably in the current corporate world and hence can be seen in the project as well. Here is an attempt to list out some salient features which differentiate between the terms Mergers and Acquisitions. Merger A Merger can be descried as a combination of two companies into one larger company; such activities are normally voluntary in nature and involve a stock swap or cash payment to the target organization. Stock swaps allow the shareholders of both companies to share the risk involved in the deal. A merger normally results in a new company with a new brand and a new company name being created. Oxford Dictionary of Business defines mergers as â€Å"A combination of two or more businesses on an equal footing that results in the creation of a new reporting entity formed from the combining businesses. The shareholders of the combining entities mutually share the risks and rewards of the new entity and no one party to the merger obtains control over another. Acquisition Acquisitions or takeover are different from Mergers. In the case of an acquisition a company unilaterally relinquishes its independence and adopts to the acquiring firms plans. As a legal point of view the target company ceases to exist as the buyer â€Å"swallows† the business. Acquisitions have the following characteristics They are a part of a well-considered company development plan It is a unilateral process Top management structure will have fewer problems Contractual regulations are simpler Time taken for an acquisition is normally shorter than a merger. However it is essential to mention here that whether a purchase is to be considered as merger or an acquisition actually depends on the whether the purchase is friendly or hostile or in the manner it is announced. The real difference hence lies in the way it is communicated and the way it is received by the shareholders, directors and employees of the target company. History of MA Mergers and Acquisition movements were normally defined and associated with the behavior of US organizations. Various authors have tried to classify the merger movements into wave. The most prominent was Weston who in 1953 described three major periods of merger movements while studying the US business behavior. Merger waves are a very generic way to describe the predominant strategy that was being adopted by organizations in that era. This has been interpreted by the different authors in different ways depending on how they have perceived by them. However it would be wrong to consider that all organizations followed the same strategy as described in the various. The start or the first wave of the Merger movement is said to be have been post the Sherman Act in 1890. Prior to 1890 there was a predominance of the polypoly market structure, this was reduced post 1890 and partial monopolies started increasing. The economic history has been divided into Merger Waves based on the merger activities in the business world as: Period Name Facet 1889 1904 First Wave Horizontal mergers 1916 1929 Second Wave Vertical mergers 1965 1989 Third Wave Diversified conglomerate mergers 1992 1998 Fourth Wave Hostile takeovers; Corporate Raiding 2000 Fifth Wave Cross-border mergers The Great Merger Movement was primarily a US business phenomenon from 1895 to 1905. It is said that during this time 1800 of small firms disappeared into consolidations with similar firms to form large, powerful institutions that dominated their markets. The relaxation of corporate laws in the United States helped the mergers, transportation and communication networks were developed which helped achieved economies of size. The second wave (1916 to 1929) saw even greater activity in mergers. The motive behind these mergers was vertical integrations. Organizations tried to achieve technical gains and to avoid their dependence on other firms for raw materials. The third wave saw the large conglomerates looking at diversification in the 60s. the process actually reached its zenith during the merge wave and was carried to its logical extreme by the conglomerate firms that rose to prominence during that time. The fourth wave in 90s saw increase in hostile takeovers and corporate raiding by the large firms. This was a wave during which vulnerable companies were grabbed up by the larger firms. The fifth wave has been categorized as starting from the year 2000 onwards and has seen a trend of increase in Cross border acquisitions. The rise of globalization has seen increased the market for cross border MA. This rapid increase has taken many MA firms by surprise as most of them never used to consider this due to the complexity involved in cross border MA. The success of these acquisitions was also limited and we saw a vast majority of them failing. Even then in 1997 alone there were over 2300 cross border acquisition worth a total of approximately $298 Million. Source: Boston Consulting Group Research Report â€Å" The Brave New World of MA-How to Create value from MA†, July 2007 Types of Mergers and Acquisitions There are various types of mergers and acquisitions depending on the type of the business structure. The classification can be based on the type of companies merging or by the way the MA deal is being financed. Here is some type of mergers on the basis of the relationship between the two companies that are merging: Horizontal Merger- This type or a merger is between two companies that share the same product line and markets and are in direct competition with each other Vertical Merger This is between a customer and company of between a supplier and a company Market Extension Merger This between two companies that sell the same products in different geographies or markets Product Extension Merger This is between two companies that are selling different but related products in the same market. Circular Merger A circular merger is very similar to a product extension merger however in this case the products being sold are completely unrelated. The merger brings in benefits by utilizing the same channels for marketing these unrelated products, allowing shared dealerships. An example of this kind of a merger is of McLeod Russel (A Team company) with Eveready Industries ( A batteries company) in 1997. McLeod Russel however was de-merged from Eveready in 2005. Conglomeration This type of a merger is between two companies that have no common business areas. Mergers can also be classified depending on how the merger is being financed as described below Purchase Mergers This kind of a merger occurs when a company purchases another. The purchase is made through cash or through the issue of a debt instrument. Consolidation Mergers In this type of a merger a new company is formed and both the companies are bought and combined under the new entity. Type of acquisitions can be described as below Amalgamation In this type of an acquisition a new corporation is created by uniting the companies voluntarily. Acquisition/Takeover In this form one company acquires another companies total or controlling interest. The acquired company either operates as a subsidiary or can be liquidated completely. Sale of Assets A company can sell off all its assets to another and cease to exist. Holding Company Acquisition This involves the acquisition of either the total or majority of a firms stock by a company. The purpose of this form is mainly to gain management control of other companies Reverse Merger In this form of an acquisition a private company with strong prospects buys a publicly listed shell company, usually one with no business or limited assets. This helps the private company to get publicly listed in a short span of time. All mergers though have one common goal and that is to create a synergy between two companies which makes the value of the combined companies to be greater than the sum of the two companies MA Process MA process can be laid down in 3 basic phases First Phase Start with an Offer The acquiring firm once decides that they want to do a merger of acquisition, they start with an offer. The acquiring company starts working with financial advisors and investment bankers to initiate contact with the target company. The acquiring must have a strategy for a merger programme, formulated by company management and approved by the director and majority stockholders. The acquiring company also at this point does a soft due diligence with the help of publicly available data and financial advisors. The purpose of this is to arrive at an overall price that the acquiring company is willing to pay for its target in cash, shares or both. Second Phase Targets Response Once the offer has been made the target company can do one of several things mentioned below Accept the offer If the target companies top management and shareholders are happy with the offer they can simply accept the offer and go ahead with the deal. Attempt to Negotiate   If the target company management and shareholders are not satisfied with the offer they might try and work out more agreeable terms with the acquiring company. Since a lot is stake for the management of the target i.e. their jobs in particular, they might want to work out better deal to keep their jobs or leave with a big compensations package. Target companies which are highly sought after with multiple bidders would obviously have a better chance of negotiating a sweeter deal. Even manager who are crucial to the operation of an organization have a better chance of success into negotiating a good deal for them. Execute a Poison Pill or similar Hostile Takeover Defense A poison pill can be initiated by a target company if it observers a potential hostile suitor acquiring a predetermined percentage of Target company stock. To execute its defense, the target company grants all shareholders except the acquiring company options to buy additional stock at a dramatic discount. This dilutes the acquiring companys share and thwarts the potential hostile takeover attempt.  · Find a White Knight In this alternative a target company seeks out a friendlier company as a potential acquiring company. The friendlier company would offer an equal or higher price with better terms as compared to a hostile takeover bid. Third Phase or Closing the Deal Once the target company accepts the offer and all the regulatory requirements are met then the deal would be executed. The acquiring company will them pay for the target companies shares with cash, stock or both. A cash-for-stock transaction is fairly straightforward: target company shareholders receive a cash payment for each share purchased. When a company is purchased with stock, new shares from the acquiring companysstock are issued directly to the target companys shareholders, or the new shares are sent to a broker who manages them for target company shareholders GROWTH STRATEGIES Concept of Growth Growth in firms can be looked at by two broad views: organic growth, or inorganic growth. Organic growth is achieved through mainly internal expansion while inorganic growth is achieved through external expansion, i.e. through consolidations, acquisitions and mergers. Growth is something for which most companies, large or small, strive. Small firms want to get big, big firms want to get bigger. As observed by Philip B. Crosby, author of The Eternally Successful Organization, if for no other reason than to accommodate the increased expenses that develop over the years. Inflation also raises the cost of everything, and retaliatory price increases are not always possible. Salaries rise as employees gain seniority. The costs of benefits rise because of their very structure, and it is difficult to take any back, particularly if the enterprise is profitable. Therefore cost eliminations and profit improvement must be conducted on a continuing basis, and the revenues of the organization must continue to increase in order to broaden the base. Most firms, of course, desire growth in order to prosper, not just to survive. Organizational growth, however, means different things to different organizations. Indeed, there are many parameters a company can select to measure its growth. The most meaningful yardstick is one that shows progress with respect to an organizations stated goals. The ultimate goal of most companies is profit, so net profit, revenue, and other financial data are often utilized as bottom-line indications of growth. Other business owners, meanwhile, may use sales figures, number of employees, physical expansion, or other criteria to judge organizational growth. Companies which are run by a product minded entrepreneur are more concerned with the growth and profitability of a firm as an organization for the production of goods and services. While companies run by empire builders type of entrepreneurs are continuously looking at expanding the scope of the enterprise. Empire builders are not satisfied are not sa tisfied with product improvement or maintaining competitive edge In terms of access to finance there are broadly five growth stages in a companys lifespan: inception, organic growth, purchased, IPO and Beyond IPO as shown in the figure below. Each stage has its own characteristics, risks and potential financial sources. Organic Growth without MA In Organic growth, growth depends on the ability to avail the available opportunities and existing resources in a more efficient way. The extent of growth of a firm is actually determined by the ability of managers, product or market factors. There is no limit to the absolute size of the firm keeping in mind the assumption that there is no fixity of capital, labor and management and the firm is capable of acquiring these resources at a price. In addition it is also assumed that there are opportunities in the economy for investments. The economies available within the firm (such as excess productive resources or managerial capabilities) disappear after the expansion is completed as they get utilized in a new activity. This means that it is only an â€Å"entry advantage†. However the firm may have these advantages in its new operations, often set up as new subsidiaries or divisions, which may grow in response to the economies in the same manner as the rest of the firm. New operations may later be spun off from the original firm without any loss of efficiency. Further, both the original and the spun off firms will have some unused productive resources which can then be used to develop new activities Inorganic growth through MA The inorganic growth strategy is dependent on MA. The idea of acquisition is that it accelerates the business model, giving it greater impetus than organic growth. Because acquisition gives the business what it cannot get quickly or incrementally. It may be a joint venture an agreement that gives both parties something they want that the other has. Acquisition targets can include both complementary and competitive businesses complementary when the target can give something an acquirer needs or competitive when the target can stop someone else having what the acquirer wants. The risks in growth through acquisitions are significant, but they can be contained through planning and due diligence. The primary risk is integration: post the acquisition is completed the new arrangements have to work and people who were not party to the negotiation have to work together. The same goes for systems and expectations as different business would have grown in different ways. A consistent culture is laudable but a wholly consistent culture will be impossible. Add regional diversity to this and the risk would become even higher. Motivations for MA Mergers and acquisitions can be motivated by either the share-holder wealth maximizing approach or the widening share ownership. The primary objectives of MA activities are diversifications, market expansion, improving competitive position and depression immunity. Given these basic objectives a different rationale can be assigned at both individual and collective levels. From the standpoint of shareholders Investment made by shareholders in the companies subject to merger should enhance in value. The sale of shares from one companys shareholders to another and holding investment in shares should give rise to greater values i.e. the opportunity gains in alternative investments. Shareholders may gain from merger in different ways viz. from the gains and achievements of the company i.e. through Realization of monopoly profits; Economies of scales; Diversification of product line; Acquisition of human assets and other resources not available otherwise; Better investment opportunity in combinations. One or more features would generally be available in each merger where shareholders may have attraction and favor merger. From the standpoint of managers Managers are concerned with improving operations of the company, managing the affairs of the company effectively for all round gains and growth of the company which will provide them better deals in raising their status, perks and fringe benefits. Mergers where all these things are the guaranteed outcome get support from the managers. At the same time, where managers have fear of displacement at the hands of new management in amalgamated company and also resultant depreciation from the merger then support from them becomes difficult. Promoters gains Mergers do offer to company promoters the advantage of increasing the size of their company and the financial structure and strength. They can convert a closely held and private limited company into a public company without contributing much wealth and without losing control. Benefits to general public Impact of mergers on general public could be viewed as aspect of benefits and costs to: Consumer of the product or services; Workers of the companies under combination; General public affected in general having not been user or consumer or the worker in the companies under merger plan. VALUATION OF TARGET COMPANIES Valuation of target companies is an essential step in the MA process. Due Diligence Due Diligence of a company; answers the question of whether a deal is being done at the right time at the right price for the right reasons. It involves an investigation into the affairs of an entity and results in the production of a report detailing relevant data and points. The investigation is performed prior to the businesss acquisition, flotation, restructuring or other transactions Due Diligence is performed by many advisors on the team. For example there may be a separate legal due diligence, financial due diligence, tax due diligence, environmental due diligence, commercial due diligence, and information technology due diligence. Financial due diligence is a vital part of the MA process. Often a problem in the financial due diligence raises point to be dealt by other areas as well, for example a financial due diligence may uncover an unusual lease obligation which then feeds into the legal due diligence. What a due diligence involves Each MA transaction is unique in its own sense hence the scope and extent of a due diligence process needs to be tailored to fit the needs of the buyer. However broadly it should cover the following aspects: The history and commercial activities of the business The organizational structure and employees Employee benefits and labor matters Its accounting policies The information systems A detailed review of financial statements A review of the financial projections Anything else the team may uncover that is relevant for the transaction Methods of Valuation The valuation of a target company normally depends on a lot of factors, it is not sufficient to evaluate the financial aspect alone. This is possible through a valuation of the 5 Ps which are: Personnel  ­- senior management of the target company play an important role in an acquisition. The acquiring firm considers the motivation, energy and intelligence levels of the existing personnel before taking them on. Product Proprietary products of a Target company increase the value of the company. Plant The plant capacity and condition of equipments also affect the valuation of a company. Potential The potential of a firms growth as compared to the industry is also a factor in its valuation Profit The declared profits of the firm is the basis of determining price. It is normally considered easier to evaluate public limited since most of the above data is publicly available in their annually published reports. In the case of a Private company it is a little more challenging to get the same information and the Acquiring company has to depend on a proper due diligence process to complete its valuation. Financial Valuation Financial valuation should answer the simple, but vital, question â€Å"What is something worth?† The analysis of target is hence based on either current projections or of the future. The process of valuations differ substantially for a listed and unlisted companies Many types of valuation metrics are used, involving several sets of metrics. On of the most common is the standard P/E ration (Price to earnings ratio) however some of the other metrics include assets value, capitalized earnings, market value, investment value, book value, costs basis valuation, enterprise value and some combined methods as well. P/E Ratio and Market Price For an unlisted company the P/E ratio of a comparable listed company is referred to and discounted based on the voting rights in the company. For listed companies the modes of valuation can be based on either earnings or assets. The market price of shares reflects the earnings per share (EPS). P/E ratio Calculated as: The P/E ratio is the current price of shares divided by the EPS. The higher the P/E ratio the higher are the future earnings expectation The P/E multiple is calculated as the multiple of net profit used to compute the companys purchase price. For example, an investor attempting to recover his initial investment in 10 years would have to earn an after-tax return of 10% on investment, plus adjustment for discounted cash flow and inflation. Discounted Cash Flow (DCF) analysis uses future free cash flow projections and discounts them (most often using the weighted average cost of capital) to arrive at a present value. DCF is calculated as: Assets Value Tangible assets, such as land and buildings, and intangible assets are assessed as per existing business practices. Goodwill is based on the companys excess earning power for certain number of years. The asset basis valuation is either on the fair value or the open market value. The dividend approach and the super profit approach can also be used for asset valuation. In the dividend, the present share prices are taken as the values of future dividends. While the super profit approach expects to get more value for a firm in addition to the value of the net assets. Capitalized Earnings This method is based on the rate of return on the capital employed Market Value This is on the basis of quoted share values at the stock exchange. Investment Value This is the cost of establishing an enterprise such as the target company and the interest on the same. Book Value This is the secondary factor in valuations and takes into account the total worth of the assets after depreciation. If the P/E multiplier is less than the book value then the book value has to be adjusted to reflect the true value. It takes into account the present net value of the real estate, machinery and equipment. Sometimes the book value may be understated in times of inflation and overstated during depression. Cost Basis Valuation This is cost minus depreciation. Intangible assets are not taken into account. Reproduction Cost This is the current cost of replacement of properties with similar design and material. Substitution Cost Substitution cost is the cost of construction of the same utility and capacity. Enterprise Value The valuation of a company is based on the Enterprise Value (EV) and its ratio to the companys sales and operating profit (PBIDT Profit before interest, depreciation and tax). Enterprise Value is calculated as: A = Market Capitalization of Stock + Total Debt on Companys books B = Investments + Cash EV = (B A) Accounting Methods The method accounting also has a significant impact on the valuation and price the seller will receive. The acquiring firm can use two principal accounting methods for valuations, they can either use the pooling of interests method or the purchase method. The main difference between them is the value that the combined firms balance sheet places on the assets of the acquired firm, as well as the depreciation allowances and charges against income following the merger. Pooling of Interests Method The pooling of interests method assumes that the transaction is simply an exchange of equity securities. Therefore, the capital stock account of the target firm is eliminated, and the acquirer issues new stock to replace it. The two firms assets and liabilities are combined at their historical book values as of the acquisition date. The end result of a pooling of interests transaction is that the total assets of the combined firm are equal to the sum of the assets of the individual firms. No goodwill is generated, and there are no charges against earnings. A tax-free acquisition would normally be reported as a pooling of interests. Purchase Method   In this method, assets and liabilities are shown on the merged firms books at their market (not book) values as of the acquisition date. This method is based on the idea that the resulting values should reflect the market values established during the bargaining process. The total liabilities of the combined firm equal the sum of the two firms individual liabilities. The equity of the acquiring firm is increased by the amount of the purchase price. Mark Up Pricing/ Premium Markup pricing or premium is the percentage difference between the trading price of the target companies stock before the announcement of acquisition and the price per share paid by the acquiring firm. Bidding firms pay large premiums to acquire control of exchange-listed target firms. Normally premiums include pre-bid run up in the target firms stock price as part of the control premium paid by the winning bidders. The valuations by the bidder and the target depend on the information each party has at the time of the negotiation. Mark Up or premium is partly decided on the basis of the relationship pattern of the acquiring firm. The pattern in some cases is that if interlocking directorship among firms. Most firms have stable and long standing relationships with professionals such as attorneys, investment bankers and accountants. These are likely to have similar effects as to interlock directorships. Managers take advice from both their interlock partners and professional firms when deciding how much to pay. Financing an MA Organizations use various methods for financing an MA deal. Often combinations of the below mentioned methods: Cash Cash payments. These are normally preferred since the organization does not have to dilute equity and there will be no change in the number of shares outstanding. Also cash transactions save time and cash can be re-invested at the face value. Financing Financing capital may be borrowed from banks or raised from issue of bonds. Acquisitions that are financed through debt are called as leveraged buyouts if they take the target private, and the debt will often be moved down into the balance sheet of the acquired company. Hybrids An acquisition can involve a combination of cash and debt or of cash and stock of the purchasing entity. POST ACQUISITION INTEGRATION After the acquisition is completed, the acquired company needs to be integrated with the acquiring company. The process of integration actually needs to be planned during the acquisition itself to ensure that the company integrates smoothly. The success of integration also depends on the managers who are responsible for the implementation. Planning The acquiring company needs to plan the post acquisition integration period. IN the initial period the target company is more receptive to drastic changes to make the company viable. Some of the basic approaches are as follows Adapting a program This should be completely aligned with the companies goals and objectives of the company and should also take into account the limitations of the company. Effective organization and leadership structure The integration process involves creating a group which focuses on creating value through specific activities and actions. A true partnership would mean involving the senior leadership of the acquired company as well in this strategic group. Minimize post acquisition exodus of critical resources It is critical to have a preventing plan in place to minimize the damage that maybe caused to the new enterprise. Any loss of critical things like market standing, key employees, brand has to be avoided. Employee issues The empl

How Natural Processes Operate at Coastal Geographic Environment Essay

How Natural Processes Operate at Coastal Geographic Environment Natural Processes are actions or events that have natural causes, which result in natural events. The three main coastal environment processes that operate at Muriwai are Coastal Erosion, Coastal Transportation and Coastal Deposition. The elements that interact to produce natural processes are wind, waves and tides. Each phenomenon at Muriwai's coastal geographic environment has been produced by interaction. Coastal Erosion is a process at Muriwai that gradually wears away the rock particles of the earth's surface, transporting them to another location. There are many types of processes that cause erosion at Muriwai such as wave erosion, wind erosion and wave refraction. Thousands of years ago when sea levels dropped over years at the Southern end of Muriwai, the sedimentary rock and sandstone was exposed to the air. Rock from volcanic activity mixed with the sedimentary rock; this is called Breccia -- a mixture of all rock. An example of this is at Maori Bay. Coastal Erosion operates at different rates and different times. Limestone rock is eroded slower than sedimentary rock. The cliff at Muriwai made of sedimentary rock was eroded back to expose 'Fisherman's Rock' - the shore platform which, made of limestone -- tended to erode back slower than the cliff. The types of wave erosion that caused this are - Hydraulic Action, when waves hit the cliff, air is forced into cracks, and then as the wave retreats this air expands explosively. Over time the cracks enlarge, weakening the base of the cliff causing erosion. Attrition is the breakdown of rock particles when they hit Otakamiro point and each other causing the base of the headland to erode. Chemical Erosion/Corrosion occurs due to the content of limestone in the rockface of Otakamiro point. The seawater combined with the limestone produces a weak chemical solution, which erodes the base of the cliff and produces a pitted effect. Chemical Weathering is when water weakens the structure of the rock and Mechanical Weathering is where water seeps into the rock face causing fragments of rock to break off. These types of erosion have caused the formation of several phenomena at Muriwai. Motutara Island (stack) was produced by the formation of two caves on either side of the headland -- forming an arch and the roof slowly erodin... ...ll build up the dunes and travel inland. Surface Creep occurs when landing sand particles remove the larger and heavier particles, pushing them forward. Suspension is the picking up of sand by wind. This is when sand is airborne and then deposited anywhere. Coastal Deposition is the third main natural process occurring at Muriwai's coastal geographic environment. It is the process of sediment being deposited to form natural features. This is when the rock fragments from Otakamiro Headland are ripped away by waves, broken down by attrition and transported along the coast where they are deposited as beaches and sand dunes. The movement of the material is called Longshore Drift; the direction of the deposit depends on the direction of the winds. Titomagnetite sand (black sand) was deposited at Muriwai when it was bought from the south by Longshore Drift. Coastal Erosion, Coastal Transportation and Coastal Deposition are natural processes that have occurred at Muriwai's coastal geographic environment. These processes outlined have formed such phenomena as Motutara Island (stack), Otakamiro Point (headland/cliff), Fisherman's Rock (shore-platform), cave and the blowhole.