LBO debt not converted to Cash?
Hi I am wondering when debt goes into the company, we adjust the BS by adding additional debt to liability, but wouldn't cash also increase on the asset side?
If you are talking about a LBO transaction, the cash you got from the debt is paid to the previous owners of the company and is not added to the company's balance sheet.
Thanks! Another question I has is, what is the PE firm actually paying using the cash and debt raised? The enterprise value of the company or the equity value?
Unless you are a really good deal maker like I am and you get the previous owners to eat the old facility.
Congrats on the asset purchase.
I guess you never heard of a CFDF transaction before or you just never actually got an LBO closed before. Not all LBOs are take private transactions.
You are hardly a good dealmaker considering many LBOs are cash-free, debt-free. I was referring to the fact that, being the quality deal maker you are, you entered into an asset sale for tax and liability reasons, correct?
I guess you never heard of a CFDF transaction before or you just never actually got an LBO closed before. Not all LBOs are take private transactions.
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