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?
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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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