The Financial Performance Analysis Of Leveraged Buyout By JCET

The Chinese economy has now entered a new normal characterized by "medium high speed,excellent structure" and economic growth has entered a "shift period".With the implementation of new regulations on the issuance of new shares and the A-shares into full circulation,under the complicated and volatile economic situation and market environment,the wave of new mergers and acquisitions in China has come.Since 2015,the number of M&A transactions has continued to grow,the trend of high-leverage acquisitions has become increasingly apparent,and the proportion of financing has rapidly risen.Leveraged takeovers have become the new darling of M&A transactions.The case of JCET Leveraged Acquisition of the STATS ChipPAC selected in this article is the first single investment in overseas M&A buy private enterprises since the establishment of the National Integrated Circuit Industry Investment Fund(IC Industry Fund)in China.In 2014,JCET launched a tender offer for STATS ChipPAC,and ultimately invested only $260 million to complete a transaction with a total value of $780 million,acquired a 50.98%stake in the M&A company,and achieved control over the M&A company.It's typical case of leveraged buyouts.Based on the theoretical research results of leveraged buyouts,this paper uses Event Analysis,Financial Indicator Analysis,and Economic Value Added to analyze the motivation and performance of JCET's acquisition of STATS ChipPAC,and finally draws relevant conclusions..This article first introduced the background of the topic,research methods and the introduction of domestic and foreign literature review content,laying the groundwork for the following.Secondly,it introduces the related theories of leveraged buyout and M&A performance,including the concept,characteristics,and methods of leveraged M&A;the concept of M&A performance,evaluation methods,and motivation theory of mergers and acquisitions.Thirdly,introducing the case to introduce the basic situation of JCET Technology,focusing on the analysis of the causes of mergers and acquisitions,and combing the entire process of leveraged buyouts.Then the research on the financial performance of leveraged buyouts,which mainly includes short-term stock returns analysis of mergers and acquisitions,financial performance analysis and EVA performance analysis,analyzes the impact of this leveraged merger on the financial performance of JCET Technology from a quantitative perspective.Finally,the summary and deficiency of the case,the corresponding conclusions and inspirations for this M&A case,to provide some ideas and lessons for enterprises to leverage mergers and acquisitions.Through the above analysis,this paper draws the following conclusions:(1)JCET has integrated its own industry development needs and responded to the call of the country,and conducted leveraged mergers and acquisitions for great value at small price.This acquisition brought advanced technology and overseas customer resources,expanded its revenue scale,increased the company's production capacity,improved JCET's industry position,integrated international resources,and promoted the progress of the domestic semiconductor integration industry.(2)Using the event analysis method,through the analysis of the excess return rate of JCET Technology,it can be seen that the market believes that this acquisition is beneficial and will help increase the wealth value of JCET's shareholder.(3)Through the analysis of financial indicators and economic value added,this acquisition has reduced the operating efficiency of JCET in a short period of time,making the value of JCET's shareholder wealth continue to decrease.Buy the 2015-2016 integration battle,the constant accumulation of synergies.After 2017,its operating efficiency and shareholder wealth will rebound,showing the positive effect of leveraged buyouts.