Key Learning Outcomes:
- Understand how operating and financial leverage work
- Identify the value drivers of a LBO
- Determine the financing possibilities
- Construct an LBO model
- Identify interesting LBO candidates from an IRR or money multiple perspective.
Revisiting the Basics of LBOs
- How do LBOs work?
- What makes a good LBO candidate?
LBO Analysis as a Transaction Valuation Technique
- Key constituents of a leveraged transaction
- Comparison of LBO valuation with other valuation techniques
Financing an LBO
- Senior debt (Term A, B and C) and second lien
- Junior debt sources including high yield and mezzanine
- Amortizing and bullet repayment loans
- Alternatives to ordinary equity: shareholder loan, preference shares
- PIK instruments, warrants, yield enhancing structures
LBO model in Excel of a Case Company
- Integrated model as a base
- Importance of financial forecasting
- Control premium for public-to-private transaction
- Entry and exit multiples
- Sources and uses of funds, including banking and advisory fees
- Building cost assumptions for all the elements of the capital structure
- Detailed cash flow statement
- Debt repayment schedules including a cash sweep accelerator
- Revolving Credit Facility
- PIK instruments
- Building and interpreting the multiple of money and IRR calculations.
- Sensitivity tables.
Free Course Reference Guide
The Complete Financial Modeller is included as part of the programme (Normal RRP £80).
This 150+ page reference guide, taken from Fitch Learning’s “Complete Investment Banker” manual, is designed to act as a comprehensive and practical Excel and modeling reference guide. It helps users become more proficient at taking an idea or objective and turning it into a robust, flexible model. It is relied upon globally by our clients to support further training after their course. The guide is applicable for professionals at every level, from Intern through to Managing Director. It contains the clearest explanation and application of technical Excel content in a way that makes it accessible to all.
Also included is the LBO Construction Kit (RRP £35)
The LBO Construction Kit, part of Fitch Learning's Complete Analyst system, is a compilation of step-by-step snapshots of how to construct an LBO/Credit model. The design and build of an LBO model requires a structured approach and this kit breaks down the approach into a series of simple steps, that will reinforce classroom learning, post programme. The LBO Construction Kit will be a valuable tool for bankers once they are at their desks.
Written by the industry's leading trainers, the LBO Construction Kit is a useful aid for quick memory recall and contains the clearest explanation and application of technical content in a manner that makes it relevant to bankers of all levels.
The programme also includes our Excel Short Cut that includes quick access to 40 of the most commonly used shortcuts.
Who should attend
Professionals in corporates and financial institutions who need to be able to model the impact of debt on the financials, as well as Research, private equity and M&A analysts who need to be able to analyse the transaction finance structure of a deal in order to maximise returns. You must be comfortable with the content of the Intermediate Excel for Financial Professionals course to attend and fully benefit from this day.