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How to Model SaaS Projections for Interviews
Hey WSO - this post is specifically for those of you in IB / Consulting who are interested in breaking into Software Buyout, Growth Buyout, Growth Equity, or Late Stage VC. Now that I'm in the industry, I want to help you guys understand how to actually model out SaaS LBOs, based on Customer Cube...
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...
IRR decomposition / Attribution in LBO
Dear all, I am currently finishing an LBO model and included an overview of value creation in terms of MOIC (equity value bridge incl. ebitda growth, multiple expansion, debt paydown etc.). So far so good. However, I am getting stuck at the following and would love to hear your input: I am trying to...
PE Case Study - Revenue/Cost Assumptions
Hello everyone, hope you are all doing we. Currently preparing for a typical PE case study for a MM fund - I expect a CIM, valuation guidance and debt indications with the task to build a three statement model and make a recommendation within 2-3 hours. Given the model build is quite challenging in...
LBO Model - IRR
LBO Model - IRR Hi, i would really appreciate if someone can help me! I‘m reviewing a business plan and i‘m not entirely sure about the correctness of IRR calculation. So the investment horizont is 8 years, in year 0 there is a negative cash flow for the sponsor (equity investment) but from the...
LBO S&U, min cash, debt rollover, OC cash interest
Hi guys, Let's say i'm doing an LBO with the following : Equity value : 200 Debt : 100 Total Cash : 60 (including minimum cash to operate the company of 10) 1) Sources and Uses I understand my S&U would be the following. Is this correct ? Should i also add the min cash of 10 in my Uses ? Will my...
4-hour LBO Model Test with RX?
deldeldel got it thx
Loan interest paid: cash vs accounting
Hi, I see a lot of assumptions being made in models when modelling cash interest vs accounting interest. For simplicity let's say this is interest being paid out for term loans. What should, in concept, be the actual difference in modelling the two? i.e. if cash interest = op. balance * interest...
LBO of private company with management reinvestment with a lot of cash on B/S - help needed
Dear community, I would appreciate your advice on the following. I am analyzing an LBO of a private company and am getting a bit confused regarding management reinvestment / rollover. Assumptions: 1M EBITDA, 10x multiple, no debt on B/S, 2M cash on B/S pre-transaction Hence, 10M EV and 12M Equity...
LBO PE Courses
Hi Monkeys, For LBO courses for PE interviews, what "paid" courses are preferable, WSP or BIWS? Many thanks!
LBO - Financing fees
Have a quick doubt and grateful if you could help me out. This is for Europe/UK. Financing/arrangement fees in an LBO, are they 1) Categorised as "Uses", amortised over time and included in D&A on P&L and on BS as asset or 2) Just not included in S&U and included as interest expense through P&L?...
Oaktree Capital Management - Real Estate Debt Strategy Case Study
Hey Monkeys I am to posting so bear with me. Anyone know what to expect for an entry level ~2h case study for Oaktree's RE Debt team? Assuming it is going to give some basic assumptions on exit / entry cap rates, options for debt financing, building characteristics and ask general questions on LIRR...
Anyone have a few hours today or tomorrow to build a basic LBO model? $$
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How to deal with assets held for sale when calculating TEV in an LBO
Hi there, I have come across an LBO case study where there is approx. $1,000M of assets held for sale on the balance sheet and approx. ~$300M of liabilities associated with those assets held for sale. When calculating TEV at Entry, which would be a better approach and why: 1) Keeping the assets held...
Useful Excel shortcuts for timed LBO modeling tests
What are some useful keyboard shortcuts that I should use during tightly-timed LBO modeling tests?
PE - 2 hours LBO with CIM - Debt assumptions & I/S
Hello guys, I have an upcoming interview where I have to build an LBO model based on a CIM (no access to internet). I would greatly appreciate any tips and insights you can provide: Debt Amount & Interest : How can I estimate the suitable level of debt and interest rate for the LBO model using only...
LBO Balance Sheet Line Items
Hey Monkeys, Going through some practice LBOs now for interview prep and one problem I'm running into is balancing out the BS when having to come up with your own projections/line items. For example, one of the practice models I have has a line item for prepaid expenses, but if you were to remove...
Choosing entry multiple for Cash Free Debt Free Transaction?
Does the amount of cash and debt that a company has on its balance sheet affect the entry multiple you use, assuming you structure it as cash-free debt-free? I know that how much cash/debt a company affects enterprise value, but in the case of an LBO model structured as cash-free, debt-free, how...
LBO Modelling Test - KKR & Blackstone
Hey, Did anybody take or have any info on 90 min LBO Modelling Test for Blackstone and/or KKR? Any info/tips/resources appreciated. - Both for PE
How to treat long-term Notes Payable in an LBO?
Hi everyone, thank you in advance for the help with this question. I am in the middle of an LBO model test, and Notes Payable is a large portion (~25%) of long-term liabilities. Curious if I should i) leave this figure as is for the projection period (and maybe sum into 'Other Non-Current...
RE Model - Cash Sweep
I noted in RE models cash sweep doesn't apply (as compared to normal LBO models). Any explaination to why is this is the case?
Private Equity LBO vs Real Estate LBO
What are the main differences between both models?
Debt Schedule in RE
Compared to a typical LBO where excess cash is used to paydown debt during the hold period, I noticed RE LBO models do not do this. Is a 100% cash sweep not a thing in Real Estate models?
Hotel LBO Model
I have a 1 hour test Hotel LBO modelling coming up Anyone has Hotel LBO models and is willing to share? I have some PE case studies and can trade. Do let me know
How to Build A Capitalization Table
Hey everyone! I have case study for a full-time private credit interview with a firm in Cali next week. I have to build an LBO model -- and a Capitalization Table. I know what an LBO model is and can build a simple one. But I've never built a Capitalization Table and am freaking out!!! I understand...
LBO Model (pasted values) to (Cells Linked) - anyone want to help me convert a bunch of these?
Model (pasted values) to Model (Cells Linked) - anyone want to help me convert a bunch of these? Help me, Help You. Have a bunch of models in excel in different formats I've identified as "Good" that I want to convert, and see what I like. Establish a few "Go To" versions depending on the situation....
LBO Model - effective date vs closing date
Trying to get my head around a problem and unable to source a real solution. In a modelling test scenario, what is the best way to tackle a question where you are given a both the actual closing date and a transaction reference date (the reference date being the most recent FYE for the business). So...
Debt repayment in LBO
Hi, I am trying to do an LBO where there is a 5 year exit but the terms for the TLB, RCF and senior notes are 7 years. How do you model this out, would you just ignore the bullet payment meant for year 7, in your 5 year debt schedule? or would total repayment be in year 5 instead?
Debt Corkscrew Calc
At its simplest, this ought to be: balance brought forward +drawdown -repayment +interest = ending bal The concept of repayment is that you never model more repayment more than the amount of loan that is accrued in that period. So if you have capability to repay $1m, but the loan /drawdown during...
Leases in LBO Modeling
Hi guys, I have a quick quesiton on how to deal best with leases in an LBO model. I totally undertstand that under IFRS 16 everything is capitalised / on the balance sheet and flows via D&A and interest into the IS. My thinking now is that if you move to the Cashflow statement you add the D&A incl....
Sensitivity to exit assumptions
How can I create a sensitivity table which output should be the exit multiple and the inputs ideally IRR and share price premium or entry multiple? I do not find a way to do so given even fixing IRR the NPV formula depends on entry and exit, so I do not know how to back solve the exit proceeds. Any...
LBO financial modelling test coming up in 4 days, which resources are best to prepare?
I have no prior experience with LBO's or PE and just know the basics. I watched some tutorials on youtube and practiced the PE interview questions here on WSO. The financial modelling interview is going to last 3 hours, and it's for an internship position in PE. I have 16 hours per day to prepare...
Management Options
Monkeys, I had a question on management options. I came across this in a recent modelling test - "Sponsor and Management have agreed a 10% option pool. This will be fully allocated at closing with the option strike price set at original cost" What do they mean by "this will be fully allocated at...
How to Complete LBO for Private Company, No Cash Flow Statement?
Relatively new to LBOs so please bear with me! Started practicing on a case where the only financial information in the CIM was a basic financial forecast (think revenue - operating expenses = EBITDA) and detailed calculations on said revenue, operating expenses, and Adj/EBITDA, no balance sheet or...
Cowen - Modeling Test
Hi Monkeys, Set to take a 4 hour case study (assuming a modeling test with recommendations) at Cowen here in the upcoming weeks and trying to prepare. Has anyone taken something similar with the firm or have tips in how best to prepare? Would appreciate any insight. Cheers.
OID - Balance Sheet Debt Impact
Monkeys, need help with the concept of OID. How does this impact the 3 statements specifically the balance sheet debt? Say we have Term Loan of £600 traded at 6% discount, term of 6 years. Tax rate of 20%. My understanding for year 1 is as follows: IS: We record $1 as an expense - Net Income is...
LBO Value Creation Decomposition - Net Debt or Total Debt Difference
PE folks out there - in decomposing the value creation for debt paydown in an LBO, do you take the difference of net debt or total debt? Does it make a difference?
Can someone help me understand the relationship between asset write-ups and DTLs?
Currently grinding LBO prep and am still pretty confused about the relationship between asset write-ups and DTLs. Maybe I'm just completely misunderstanding this, but I thought the idea was that asset write-ups create increased depreciation expense that reduce book pre-tax income, but they do not...
Management Options - LBO
I came across the below in an LBO modelling question. What do they mean by "option strike price is set at Sponsor's original cost"? Can you walkthrough how this will be dealt with? "Management have agreed to a 5% option pool that will be fully allocated at closing. The option strike price is set at...
LBO Modelling Test - Financing Fees
When in an LBO Modelling test, if no indications are given in the prompt, should we assume that financing fees are being capitalised or not? If so, when putting together the post-transaction BS, should we assume that those are being accounted for in the Assets or in the Liabilities section? I have...
LBO Waterfall Help
Hi Monkeys, I got a LBO modelling test with the below waterfall structure: - Term Loan @ 3x LTM EBITDA - Mezzanine Structure @1.5x LTM EBITDA with 2% warrants on exit equity value - Management incentive plan with a hurdle rate of 10% Say we have an exit equity value of 500M. How would you structure...
Debt Prepayment Penalty in LBO
Did a recent modelling test which had a debt prepayment penalty clause on a buyout. Is this cost normally bored by the buyer or seller? I am guessing buyer, and if so how will this impact the LBO?
LMM 60-min modeling test
I have final round interviews coming up with a LMM fund, and I need to brush up on my LBO modeling skills. Does anyone have 60-75 min modeling tests they could send my way? Happy to provide a fintech, strategic finance case study in return.
PE Modeling tests
Hi all, I am interviewing with large cap PE funds in Europe and was wondering if someone has some modelling tests available from previous interviews. Happy to as well help on other topics! I will return the favour!
What are some good public LBO candidates?
Want to get some practice with LBO modeling, so wanted to ask what are some good companies to practice a buyout model on. Thanks for the help
LBO Test vs. CIM LBO test
Hello all, I have a modeling test coming up in 2 days for a PE, and I know I will be required to build an LBO based on a CIM. I have found a few good practice cases on the internet, but (I guess obviousy) I couldnt find one to be built using a CIM. Could anyone simply explain what main differences I...
PE Case study help!
Hi all, I'm sitting a 3 hour LBO modelling test / case study this week. Would anyone be willing to advice. Many thanks!
LBO Model Help
Hey everyone. I've been working on an LBO model for an online course I've been taking for fun, but I'm having trouble completing it. Is anyone willing to help me out or give me some pointers? I'm stuck and I don't really know how to proceed. Thanks!
learn how to LBO in a day?
Interviewing for a lateral position next week and don't have a ton of experience with LBOs. I know what they are, why they're used, who good candidates of an LBO are, and can do a paper LBO, but I don't have much modeling experience. Is it possible to get proficient at it in a day? If so, do you...
LBO Model Help
Hi guys, Can someone help me out with an LBO model case study? Greatly appreciated!
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