LSP FB B2 – Unit 9: Mergers and Acquisitions

Antitrust regulators

Government officials who make sure companies don't become too powerful and hurt competition.

Asset-intensive companies

Businesses that need a lot of physical things, like machines or buildings, to operate.

Brand recognition

How easily people can identify or remember a company's name or logo.

Capital expenditures

Money a company spends to buy or improve long-term assets, like equipment or buildings.

Capitalize

To record a cost as an asset, instead of an expense, because it will help the business for a long time.

Compliance

Following laws, rules, and company policies.

Consolidation

The process of combining two or more companies into one.

Coordinate

To organize people or activities so they work well together.

Cultural clash

Problems that happen when two companies have very different ways of working or thinking.

Customer base

All the people or businesses that regularly buy a company's products or services.

Debt financing

Borrowing money through loans or bonds to fund business activities.

Discount rate

The interest rate used to calculate the present value of future money.

Discounted Cash Flow (DCF) method

A way to estimate a company's value by looking at its future cash flow and adjusting it to today's value.

Due diligence

A careful check of a company's finances, risks, and details before buying or merging with it.

EBITDA ratio

(EBITDA = earnings before interest, taxes, depreciation, and amortization) A measure of a company's performance before interest, taxes, depreciation, and amortization.

Economies of scale

When a company saves money by producing more at a lower cost per unit.

Eliminate competition

To remove rivals from the market, often by buying them.

Enterprise value (EV)

A measure of a company's total value, including debt and cash.

Expand market share

To increase the percentage of sales a company has in a market.

Financial statement

Official documents that show a company's financial activities and condition.

Free cash flow (FCF)

The money a company has left after paying for its main operations and capital spending.

Horizontal merger

When two companies in the same industry and at the same stage combine.

Intellectual property

Creations like inventions, designs, or brand names that belong to a company.

Inventory

The goods a company has ready to sell.

Net value

What a company or asset is worth after subtracting costs or debts.

Preliminary analysis

An early study or review done before deeper investigation.

Price-to-book (P/B) ratio

A comparison of a company's stock price to its book value.

Price-to-earnings (P/E) ratio

A comparison of a company's stock price to its earnings.

Propel

To push or move something forward, such as business growth.

Property

plant, and equipment (PP&E), Long-term physical assets like buildings, machines, and land.

Regulatory

Related to rules and laws set by governments or agencies.

Scrutinize

To examine something very carefully.

Stifle innovation

To stop or slow down new ideas or improvements.

Streamline

To make a process or system simpler and more efficient.

Supplier and distributor

A supplier gives materials to a company, while a distributor helps sell and deliver products.

Supply chain

The entire system that brings a product from raw materials to the customer.

Sustainable

Able to continue over time without harming the environment or society.

Tangible and intangible assets

Tangible assets are physical, like equipment; intangible assets are non-physical, like patents or trademarks.

Unlock new opportunities

To discover or create new chances for success or growth.

Valuation

The process of figuring out how much a company or asset is worth.

Vertical integration

When a company controls more parts of its supply chain, like production, distribution, and sales