Abstract
The purpose is to study the performance compensation of the bid purchased during the mergers and acquisitions (M&A) process. An intelligent model of enterprise performance appraisal is built to analyze the performances of the acquired enterprises. First, the evaluation indicators of enterprise performance are selected from both financial and non-financial aspects. An enterprise performance appraisal model is established based on the neural networks and optimized by the factor analysis method and Genetic Algorithm (GA). The principal factors affecting enterprise performance are analyzed. Then the M&A parties’ performances during the M&A commitment period under the earnings compensation mechanism are analyzed quantitatively. Corresponding hypotheses and evaluation indicators are established. Mean test results and regression analyses demonstrate that the hypotheses proposed are valid under particular circumstances. Introducing the earnings compensation mechanism during the M&A process can improve the enterprise performance effectively so that the earnings forecasted in the commitment period are significantly higher than the historical profitability. Hence, the earnings compensation mechanism plays a positive role in guiding enterprise performance. Comparison with models proposed in previous research reveals that the output error ratio of the designed corporate performance evaluation model is 1.16%, which can effectively evaluate corporate performance. The above results provide a reference for studying the impact of the earnings compensation mechanism on enterprise performance during the M&A process.
Highlights
The mergers and acquisitions (M&A) of an enterprise refers to its external expansion through equity transactions and capital operations, strengthening its development
In the M&A process, the asset pricing mechanism is the core, and the asset appraisal report in the M&A business is a vital basis for asset pricing, which can affect the success of an M&A project
The results show that the designed BP-Genetic Algorithm (GA)
Summary
The mergers and acquisitions (M&A) of an enterprise refers to its external expansion through equity transactions and capital operations, strengthening its development. Impacts of the genetic algorithm-based intelligent enterprise performance appraisal model boosts, industrial integration is accelerated, and the transaction scale of China’s M&A market increases significantly, with an increasingly tremendous quantity of large-scale M&A events. Performance commitment refers to the commitment agreement signed by both M&A parties. The acquired enterprise needs to make a commitment to its future performance to prove its value [2]. Signing an actual performance commitment can prevent M&A premiums and the inflated valuation of the acquired enterprise’s assets under the income approach. It is indispensable to establish a reasonable and adequate enterprise M&A valuation model
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