LBO modelling

Event type: Mastercourse

Discover how to construct a flexible model

Date Location Price  
4 September 2012 - 09:00 London Price: GBP 695.00
Members: £625.00
Corporate discount scheme: £560.00
+ VAT on all prices
6 December 2012 - 09:00 London Price: GBP 695.00
Members: £625.00
Corporate discount scheme: £560.00
+ VAT on all prices

Who will benefit

All, whether experienced or new to financial modelling, carrying out business analysis that requires them to construct, specify, or design Microsoft Excel-based financial models. Delegates should have a sound knowledge of Excel and fundamental accounting.

What you can gain

During this one-day course, delegates will construct a flexible model capable of analysing the suitability of a target business to a leveraged buyout. Typical LBO constraints will be introduced and flexed to analyse the most appropriate structure to optimise sponsor returns. Through this process, delegates will understand the dynamics and drivers of value in LBO transactions. Best-practice financial modelling will be applied throughout.

Courses are capped at a maximum of 12 delegates to ensure you receive the most effective training during your session.

 

Speaker Details

The speaker will be drawn from a pool of qualified professionals who specialise in this subject. Having worked for leading organisations they will relate the course content to real life case studies.

Outline

Identifying the key LBO success factors.

  • Length of investment.
  • Exit routes – IPO, trade sale, secondary buyout, liquidation.
  • Cash generation and profitability growth of business being acquired.
  • Source, length and credibility of forecasts.
  • Exit multiple growth.
  • Finance mix.
  • Typical profiles.

Creating the operating model.

  • Sales, EBITDA and working capital.
  • Capex and depreciation – cascade versus BASE calculations.
  • Tax (including losses).

Sources and uses of funds.

  • Uses of funds: equity acquisition, refinanced debt, options, fees.
  • Sources: debt capacity; debt/EBITDA multiples; senior tranches; mezzanine versus high yield versus vendor notes.

Building the debt schedules.

  • Circularity issues – planning to avoid.
  • Amortising versus bullet tranches.
  • PIK interest.
  • Revolver.
  • Key outputs.

Equity return.

  • IRR and cash/money multiple.
  • Value creation profile.
  • Sales growth versus margin versus de-leverage versus exit multiple arbitrage.
  • Coverage ratios and repayment profiles.

Quality control in models.

  • Error flags if repayments not covered, revolver drawn, covenants breached.

6 CPD hours (if applicable)