Potential LBO Targets
I want to put together a potential LBO, but am having trouble find good targets. Any advice or suggestions of some good ones?
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OP, are you asking for tips and strategies for selecting firms ripe for an LBO? Or are you asking WSO outright for literal targets?
I'd be interested in the tips and strategies.
I'd be interested in tips and strategies for selecting firms ripe for an LBO, if you can elaborate :)
I'm afraid I don't understand what you're asking me. I am also a student so I can not give you any advice, I am just here looking for the same thing you are looking for. Did you mean to ask me something else?
KKR Associate - "Well I've spent about 90 hrs/week for 3 weeks finding a good LBO candidate, but I guess I can tell you since you asked on WSO"
I noticed a few companies that have zero to low debt: Monster Beverage Corp Dick's Sporting Goods Boston Beer Company
Think Coca Cola already had minority ownership of Monster and probs has ROFR. Dicks sporting goods...never seen financials but I bet akin to Sears...aka core operations going downhill, maybe has real estate to sell off.
I doubt anyone here would be able to give you some actual names/industry advice , so here're some textbook queries for LBO prospects. I should stress that not all or most have to apply in actual settings.
This is solid advice, thank you.
Do your homework.
The criteria for a good LBO candidate are outlined on every career advice/PE/whatever side.
The thing what interested me is: how to relatively determinant whether a potential target has a low capex req./debt level/etc - given its industry. I do understand financial statements and recognized the big picture, but when i calculated e.g. FCF conversion i cant say whether it is sufficient or not. Sure a e.g. 75% cash conversion seems high but what about the context. It might seem high for Industry A but not for Industry B. Same for any other metrics. I know that e.g. interest cover should be generally be over 1.5x but I only know this as somebody told me this.
Is this judgement only gained by experience, or, is there any reliable information/books where I can get a sense about the relativity measurement of any LBO metrics.
LBO Targets using CapIQ (Originally Posted: 09/14/2009)
What would be the best way to search for potential LBO/MBO's using CapIQ?
Focus on Market cap below certain amount $500MM? EV/EBITA = 4x? EBITDA > x? Capital assets/Total assets > 60%? Debt/Equity 0.5? Any other characteristics that would be useful?
Sorry if these sound like noob questions but was asked by boss to do a quick and dirty search on this.
Any insight would be appreciated.
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