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Consolidation of holding and its sole subsidiary
I need to consolidate the accounts of a holding company and its sole subsidiary. The holding company has no activity; it solely earns revenue in the form of dividends from its subsidiary. In the Balance Sheet, it owes money to its subsidiary (that can also be found as receivables in the...
LBO: Net Debt vs Debt in minimum equity
Hi guys, I am doing the "WSO-PE-Guide-Full-LBO-Example-1-vF" exercise and had a question on coming up with the S&U. I'm sure you guys are familiar with this but the prompt said minimum equity of 30% and PIK notes is $450 in the staple financing package and is a plug on Sources. If I were to use...
Sources & Uses - Cash Free / Debt Free LBO (picture included)
Hi all - Been trying to fully understand the sources & uses of CF/DF LBOs vs. Non-CF/DF LBOs. The picture is an example. Am I approaching this the right way? Thanks.
LBO modeling for software companies
All the LBO modeling tutorials out there are for traditional companies (i.e. companies with tangible assets.) But there are more PE firms moving into tech and since they are usually not profitable, they use revenue multiples. So my question is, how do you model a software LBO? Other than using...
Bridge Loan LBO Model
Understood that bridge loans are typically replaced by high yield bonds, but is anyone aware on how that would affect the inputs on the LBO model? That is, should the bridge loan debt repayment schedule mirror that of a typical high yield bond debt repayment schedule? Or is there a better way to...
LBO - Seller Note, how to model S&U and 3 Statements
Took a model test recently, that included the transaction being funded with a 1.0x contingent seller note. this note is assumed to be paid out in full (at exit) if seller meets a certain ebitda target at exit, and is payed out at a certain % between a range of EBITDAs. Does this show up on S&U? Also...
Monthly LBO model
This might be a stupid question, but modeling a company that has negative debt going to the balance sheet once it runs out of cash and needs an equity infusion. It is a monthly model. I modeled in a revolver that will draw down the total cash need / full sweep with no limit so there will be no cash...
Modeling debt paydown monthly
I am working in a 3-statement monthly operating model that sums 12 months into a consolidated yearly output. I have to take on a revolver and term loan one year into the model. Having trouble showing the debt paydown schedule because its by month. Any advice is much appreciated.
PE Model Question - Revolver
I'm working on a case for school where we are doing a mock LBO . How can one determine the size of a revolver needed relative to the rest of the debt or relative to EBITDA ? Thanks
How much preferred equity to include in LBO?
If I have to include both common and preferred equity in the capital structure of an LBO I am building, what would be a reasonable amount of preferred equity to use? If I am going for about 60% debt and 40% equity, how much of the 40% should be common vs preferred?
Payback analysis question
Would like to seek some help on the computation for payback analysis. I checked out Wallstreet Training's model (http://www.wallst-training.com/resources/WST_Payback_Period_Example.xls) and it used Undiscounted Net Cash Flow for computation. With respect to an LBO model, can I check if my...
LBO model taking too long to converge
I built an lbo model that's balanced and working okay, but it's taking a long time to run through iterations to balance everything. I turned off automatic calculations for data tables and it still takes ~4,000 iterations to get through all the circular references. Any advice to get this to run...
Help with basic LBO model
Hi Guys! I'm hoping I can get some help with this, i'm trying to work out the basics of an lbo model and ran into a few questions. One of the ones I had was, what happens to all of the debt the seller had, does existing debt matter? or not because it is the sellers responsibility. Also, I've...
LBO Model Question: Using IRR as Input
Need help with a comment an MDs gave me on my model: Right now, I'm assuming an exit multiple, assuming an IRR (of 25%), and then working backwards to find an implied entrance multiple. Basically, a simple lbo model , finding sponsor ability to pay (although we're not building in debt, because this...
Calculating Value of Warrants at Exit
Quick question guys, I'm working on an LBO of a private company that involves sub debt (11% cash coupon, 1% PIK, and penny warrants for 2% of the fully diluted equity). The deal also includes a management option pool for 10% of the business. I'm currently calculating the equity value at exit and...
Quick Thoughts on LBO Model
Hi guys, Sending in a take home lbo model for a buyout shop in a bit, just wondering if anyone had some time to take a look. I'm not coming from a traditional banking or MBB background, so any tips or hints would be greatly appreciated. PM me if interested, but feel free to post your feedback...
LBO Modeling Help!
Hi! To all the modeling gurus out there - I'm new to WSO so please excuse me if this specific questions has already been answered. I've recently been through several LBO modeling tests and have seen several times transaction assumptions that say something like "10% management option pool struck at...
Noob LBO model question - pls help!
I've got a bit of a noob question, I hope you can help me out. Let's say I need to do an lbo model for sometime this year (let's say it can happen anytime from March 2011 to dec 2011), and all I have is an income statement that ends at the operating income level but I have annual #s, and I have a...
LBO Model Question - Confirmation of validity?
Ok.... so I need to talk this out loud followed by critique or confirmation of the validity of what Im doing. Ok so TEV = Mkt. Val. Equity + Debt + Pref. Eqty. + Min. Int. - Cash Fully diluted ShO: 10 million LTM EBITDA : 100M Purchase Multiple: 10x Cash: 100M No preferred, min. int. or debt So...
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