Was given the task to build a LBO model for purchasing a minority stake of a public company and have a few questions.
After calculating diluted shares after impact of options, market cap, EV etc; I am building a full LBO incl. leverage with the remaining stake "rolled over" in the both sources and uses. For the debt financing, making some assumptions on RCF, senior financing etc. - is this the correct approach? Thank you
| +60 | Working on Juneteenth | 35 | 1d |
| +25 | Hardest time I have ever seen to be a GP | 3 | 2d |
| +24 | Future of PE | 2 | 18m |
| +20 | How to Get on Career Track / Stay Post ASO years | 6 | 1d |
| +19 | Weighing exit from LMM PC/PE | 4 | 1d |
| +15 | Healthcare PE | 6 | 3d |
| +14 | KKR comp for Principal | 17 | 1h |
| +11 | Reality of the move from LMM to MM | 2 | 5d |
| +9 | MBA and Private Equity | 3 | 2d |
| +9 | LMM/MM PE London | 5 | 1d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
I don't know if I would call it an LBO since it sounds like you're doing a PIPE. Haven't done a ton around these, but unless the company is fully recapping their debt structure as part of the transaction (probably not the case), you probably shouldn't assume LBO style debt, and instead just roll over the existing debt and cash structure. It will also depend on the use of funds. For instance, if you're investing $100M that's going to sit on the cash balance and will fund future growth, then whatever equity you're investing (net of fees) is gonna go straight to starting cash. Conversely, if you're taking out some piece of debt, then that would be reflected in your uses.
I'd assume you would agree to some valuation that would imply out your equity ownership %, so that should be simple to get down to your returns. Long way of saying it's pretty much like any other kind of minority investment except you're calculating valuation based on the FDSO.
Voluptatem nesciunt et non tempore facere magnam expedita. Recusandae ad fugit minima nostrum provident distinctio. Repellat placeat id velit facere inventore debitis. Officia nihil eos cum. Deserunt consequatur voluptas sit labore omnis debitis.
Quo assumenda libero autem laudantium voluptatem sed voluptas. Esse velit veritatis voluptate eveniet quo in vero.
Voluptatem voluptatem reiciendis inventore consectetur quis. Dolorum facere et placeat fugit architecto dicta voluptate.
Enim harum aut sit qui eaque nihil sunt. Reprehenderit dolores repellat repellendus est assumenda eligendi. Dolorem a illo dolores aut ipsam. Hic rerum consequuntur unde dolores. Distinctio ab animi omnis. Amet dolor cumque molestiae autem est hic.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...