Feb 28, 2011

What kind of deal is this and can you point me out to a good template?

I am working on a model for a small firm that is looking to purchase a majority share of a division of a publicly traded company. The problem is, I'm not sure how to structure it--it it an asset sale? LBO?

To clarify, let's say that PE Capital is looking to buy the Widget division of Newco. Newco is a publicly traded company. PE Capital would like to buy 81% of the Widget division through a combination of equity and 3-4 tranches of debt (senior, junior, etc.). What kind of template should I use?

How would you structure this deal? What are the various sheets I need for this model? I'm very new to all of this. Any comprehensive, overview/walkthrough help would be much appreciated. Please feel free to ask questions, as I probably did not provide all of the necessary information.

Thanks a ton.

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4 Comments

analystforhire

15y

Smells like LBO, but I think there are different tax implications vs. asset sale so I'm not entirely sure.

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Authored by: Certified Private Equity Professional - PrincipalCertified Private Equity Pro

DumbNewbie

15y

^ To that effect (LBO), what should I put in for current share price and such? There is obviously a share price for Newco, but not a separate share price for the Widget division.

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heebbanker

15y

Structurally, it sounds like an LBO, but I don't see how you can buy part of a division in a publicly traded company unless it will be spun out (at least partially).

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Authored by: Certified Investment Banking Professional - 2nd Year AssociateCertified Investment Banking Pro

jimbrowngoU

15y

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