Pearl and Rosenbaum IB book. 1st vs 2nd Edition

machineman13's picture
Rank: Baboon | 114

The authors note that the 2nd edition is edited to reflect changes in IB after the financial crisis but I'm only looking for an introduction and was told this book was one of the best for what I'm looking for. I already have the 1st edition but am wondering if I should buy the second one and spend my time more efficiently. For a person looking for an introduction to IB, would it be worth getting the 2nd edition of the book if the 1st edition is already paid for?

Comments (7)

Dec 18, 2013

no, stick with the first edition

Dec 18, 2013

Never read the second edition but I wonder what kind of changes did they introduce in light of the financial crisis. Surely the mechanics of putting together M&A and lbo models are still the same as before the crisis. Maybe they meant that underwritting assumptions are more conservative than before which impact comps/precedents selection and choice of discount rates etc. In other words, deal specific info. If you are interested to learn modeling then I don't see how the 2nd edition could be that different, financial crisis or otherwise. Unless they added some new modeling exercises which have nothing to do with the crisis per se.

Dec 18, 2013

I'm not sure. They said they have more pages on LBO's and M&A in general as well.

Dec 18, 2013

I own the second edition. What you gain by buying the 2nd edition is a more extensive section on M&A and LBO modelling, and access to the 2nd edition excel templates if you buy the more expensive version of the book (the 1st edition templates are no longer available on the official site). Honestly you can find a pdf version of the 2nd edition online if you dont mind the hook hand and parrot on the shoulder aspect, and as such I doubt that the excel templates would be worth the purchase.

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Feb 13, 2014

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Jul 19, 2015

The second edition has the merger consequences analysis with a dedicated chapter on buy-side M&A - this is the significant addition. They have also included analytics from Bloomberg in the second edition. The theory remains the same (as with their first edition) with the figures reflecting the update. The chapters are:

Comparable Companies Analysis
Precedent Transaction
DCF Valuation
LBO Introduction
LBO Analysis
Sell-side M&A, and
Buy-side M&A (new chapter with merger consequence analysis)

If I'm on the buy-side or aim to move into it, I'll buy the book. And, I'm going to keep the book in my shelf throughout.

Oct 9, 2017
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