LBO and Credit Modeling
Short course
In New York (USA) and London
Description
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Type
Short course
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Level
Intermediate
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Location
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Duration
1 Day
The aim of this new course is for participants to build a (tutor led) LBO model in class. This model will be fully functioning and flexible. You must be comfortable with the content of the Mastering Excel course to attend and fully benefit from this day. Firstly participants will learn the rationale for leveraged buyouts. A good LBO (ability to pay) model will assess whether a proposed transaction structure can be supported by the free cash flows of the business.
By the end of the course, participants will have the tools and techniques to be able to:
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.
Facilities
Location
Start date
Start date
Start date
Reviews
Subjects
- LBO modelling
- Excel
Teachers and trainers (1)
TBC TBC
TBC
Course programme
- How do LBOs work?
- What makes a good LBO candidate?
- Types of LBO: MBO, MBI, BIMBO, BOMB, IBO, SBO, LBU
- Which participants are involved?
- Operating leverage versus financial leverage
- Practical implications.
- Key constituents of a leveraged transaction
- Comparison of LBO valuation with other valuation techniques.
- 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.
- 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, including dealing with warrants
- Sensitivity tables.
Additional information
LBO and Credit Modeling