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LBO Modeling Course

LBO Modeling Course

LBO Modeling Course

LBO Modeling Course

15 Modules

123 Lessons

8.5 Hours

11 Quizzes

In this course, we’ll assume that Nike is taken private by a consortium of private equity megafunds. With 124 lessons and 8+ hours of video content and a detailed case study framework, you’ll learn exactly how to build a detailed leveraged buyout model with critical sensitivity analysis and detailed nuances only the most veteran private equity professionals know. This course includes complex modules on the 2017 tax reform as well as bonus modules on purchase accounting in the context of an LBO, dividend recapitalizations, and how to build in a roll-up strategy into your LBO model.

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Module 1: Introduction

1.1 - WSO Academy: Land Your High-Finance Role

3m 28s
1.2 - Welcome

3m 21s
1.3 - Why learn this material?

1m 35s
1.4 - Course Prerequisites

1m 19s
1.5 - Course Overview

4m 17s
1.6 - Key Terms and Definitions

1m 26s
1.7 - Quiz

Module 2: LBO: The Big Picture

2.1 - How Leverage Magnifies Returns

2m 18s
2.2 - How Leverage Magnifies Losses

2m 23s
2.3 - Debt Paydown and Returns

1m 27s
2.4 - LBO at a High Level

1m 33s
2.5 - Commentary on Leverage

2m 40s
2.6 - Key Drivers of Return

3m 8s
2.7 - Internal Rate of Return

2m 36s
2.8 - IRR Functions in Excel

3m 3s
2.9 - IRR and Timing of Cash Flows

2m 11s
2.10 - IRR versus WACC

3m 6s
2.11 - Critiques of IRR

3m 19s
2.12 - What Makes a Good LBO?

3m 37s
2.13 - Simple LBO Example (“Paper LBO”)

6m 9s
2.14 - The Case: Leveraged Buyout of Nike by Shoe Dog Capital

1m 51s
2.15 - Quiz

Module 3: Valuation and Transaction Assumptions

3.1 - Adjusted EBITDA at Acquisition

4m 6s
3.2 - Acquisition Multiple

1m 35s
3.3 - Building from Enterprise Value to Equity Value

2m 41s
3.4 - Implied Share Price

4m 28s
3.5 - Other Key Assumptions

3m 59s
3.6 - Quiz

Module 4: Sources and Uses: The Theory

4.1 - Overview of Uses

2m 43s
4.2 - Overview of Sources

3m 22s
4.3 - Key Terms: Liens and Amortization

3m
4.4 - Key Terms: Interest Rates and Covenants

2m 59s
4.5 - Covenants

2m 3s
4.6 - Limits to Leverage at Acquisition

3m 49s
4.7 - Debt Tranche Overview

2m 23s
4.8 - Revolver

2m 50s
4.9 - Term Loans

2m 16s
4.10 - Senior Notes

1m 27s
4.11 - Subordinated Notes

1m 30s
4.12 - Mezzanine Financing

2m 3s
4.13 - Preferred Stock

2m
4.14 - Debt Tranche Recap

1m 33s
4.15 - LBO QUIZ 4

Module 5: Sources and Uses: Application to Nike Case

5.1 - Financing Assumptions: Leverage Ratios

5m 7s
5.2 - Financing Assumption: Fees & OID

2m 51s
5.3 - Filling in the Uses

2m 18s
5.4 - Filling in the Sources

4m 12s
5.5 - Quiz

Module 6: P&L Projections & LBO Adjustments

6.1 - Key Changes to P&L

3m 52s
6.2 - Linking the Income Statement

3m 43s
6.3 - Linking the Cash Flow Statement

4m 40s
6.4 - Quiz

Module 7: Debt Schedule

7.1 - Introduction to Debt Schedule

1m 10s
7.2 - Calculating Cash Flow Available for Debt Service

2m 43s
7.3 - Creating the Revolver Schedule

5m 6s
7.4 - Creating the Term Loan Schedule

4m 8s
7.5 - Creating the Subordinated Debt Schedule

4m 23s
7.6 - Creating the Mezzanine Financing Schedule

2m 50s
7.7 - Creating the Preferred Stock Schedule

2m 9s
7.8 - Interest Expense - Floating Rates

4m 49s
7.9 - Interest Expense - Fixed Rates

3m 16s
7.10 - Financing Fees and OID

2m 15s
7.11 - Net Interest Expense and Circularity

4m 29s
7.12 - Preferred Stock Dividend

1m 28s
7.13 - Linking to Income and Cash Flow Statements

8m 24s
7.14 - Credit Metrics Overview

4m
7.15 - Credit Metrics Memo Line

3m 37s
7.16 - Calculating the Credit Metrics

5m 29s
7.17 - Quiz

Module 8: Balance Sheet and Adjustments

8.1 - Intro to the LBO Balance Sheet

1m 27s
8.2 - Prepping the Balance Sheet and Linking CAs and CLs

7m 9s
8.3 - PP&E and Intangibles

2m 28s
8.4 - Debt

2m 12s
8.5 - Deferred Financing Fees and OID

3m 29s
8.6 - Preferred Stock

1m 48s
8.7 - Goodwill

2m 43s
8.8 - Equity

5m 40s
8.9 - Quiz

Module 9: Taxes

9.1 - Summary of 2017 Tax Reform

3m 50s
9.2 - Interest Deduction Limit

6m 6s
9.3 - Disallowed Interest Carryforward

5m 57s
9.4 - Accelerated Capex Expensing

7m 15s
9.5 - Depreciation Spend Foregone

6m 13s
9.6 - NOL Overview and Build

9m 11s
9.7 - Completing the Tax Schedule

4m 10s
9.8 - Quiz

Module 10: Exit, Returns, & Sensitivity Analysis

10.1 - Calculating Equity Value at Exit

5m 9s
10.2 - Calculating Fully Diluted Shares

5m 7s
10.3 - Calculating Dilution from Options

4m 47s
10.4 - Calculating Proceeds Received at Exit

1m 47s
10.5 - Calculating Sponsor Returns

6m 7s
10.6 - Checking Returns

3m 22s
10.7 - Key Drivers of Returns

5m 5s
10.8 - Sensitivity Analysis: Entry Multiple vs. Leverage

6m 25s
10.9 - Sensitivity Analysis: Entry Multiple vs. Exit Multiple

3m 20s
10.10 - Model Recap

6m 37s
10.11 - Quiz

Bonus Module A: Purchase Price Accounting

11.1 - Introduction to Purchase Price Accounting

4m 20s
11.2 - Calculating New Goodwill Creation

3m 10s
11.3 - Treatment of Incremental D&A

2m 43s
11.4 - Deferred Tax Liability Creation

5m 34s

Bonus Module B: Dividend Recap

12.1 - Introduction to Dividend Recapitalizations

1m 29s
12.2 - Setting the Dividend Recap Parameters

6m 6s
12.3 - Calculating the Special Dividend to Sponsor

10m 15s
12.4 - Creating a New Debt Tranche for the Dividend Recap

4m 14s
12.5 - Impact to Interest Schedule

4m 24s
12.6 - Impact to Cash Flow Statement

2m 37s
12.7 - Impact to Balance Sheet

3m 42s
12.8 - Impact to Returns

6m 12s

Bonus Module C: Add-On Acquisition Build

13.1 - Introduction to Add-On Acquisitions

1m 43s
13.2 - Setting Key Assumptions for the Acquisition Build

6m 46s
13.3 - Creating the Acquisition Toggle

6m 10s
13.4 - Creating the Representative Acquisition Build

3m 49s
13.5 - Creating the Acquisition Waterfall - Revenue

6m 20s
13.6 - Completing the Acquisition Waterfall

5m 11s
13.7 - Creating the Combined P&L Build

4m 41s
13.8 - Editing the Income Statement

3m 40s
13.9 - Editing the Cash Flow Statement

2m 48s
13.10 - Editing the Balance Sheet

4m 14s
13.11 - Editing for Pro Forma EBITDA

4m 11s
13.12 - Assessing the Impact to Returns

5m 54s

Module 14: Case Studies

14.1 - Crescent Capital Case Study - Private Credit

Module 15: Final Assessment

15.1 - Final Assessment

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