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LBO pro forma balance sheet adjustments - cash to seller
Hey guys, I'm hoping you can help me with a journal entry I'm working on in a pro forma balance sheet. I'm building an LBO model and the business started with $2mm of cash. I've already created my purchase accounting entry, funding entries, transaction expenses, and deferred financing fees. Now, I'm...
LBO Model for Coinvestments
Does anyone have an LBO model for a coinvestment they could share? If not, could anyone shed any light on any differences to consider between a coinvestment and traditional buyout LBO?
Free Cash Flow Iteration
To qualify this post I have about 6 months of LBO modeling experience. As a general rule, I calculate FCF for debt paydown as: FCFDP = NI + Depreciation + Amortization - Capex +/- Change in NWC I am aware there are multiple ways to think about arriving at a FCF calculation but am curious why it's...
Modeling NCI in an LBO
Hi all, currently working on an lbo model and was wondering how to generally treat non-controlling interest. Is it common for the sponsor to acquire the remaining portion of subsidiaries that the target company doesn't own, or does the target company generally continue to subtract the portion of...
LBO Model question
In an LBO deal, do we have to use the target's cash on hand as a source? Say if target has $2MM cash on it's BS and Sponsor is contributing $20MM in Equity, do we include the cash on hand as extra source or the Sponsor's equity includes the $2MM? 2. A hypothetical deal has the following structure:...
Screening in CIQ for firms acquired via LBO - historic
Hi guys, I'm currently doing some research about the influence of hot debt market on the leverage of LBOs and the subsequent firm growth of the targets. I use Mergermarket to construct the list of LBOs in line for my research, but unfortunately Mergermarket doesn't provide financial information...
LBO logic confusion?
I don't understand how minimizing cash and maximizing leverage leads to higher returns? I mean, how does using $2B of equity and $3B of debt boost your returns more so than $3B of equity and $2B of debt? I keep reading explanations about this online but it's not clicking for me.. Maybe I need to...
Modeling debt paydown monthly
I am working in a 3-statement monthly operating model that sums 12 months into a consolidated yearly output. I have to take on a revolver and term loan one year into the model. Having trouble showing the debt paydown schedule because its by month. Any advice is much appreciated.
LBO Question: EBITDA Multiple Expansion
Hi there -- I was hoping to get some clarification in regards to EBITDA Multiple Expansion When textbooks (R&P) refer to "EBITDA Multiple Expansion", does that mean the EV / EBITDA multiple? As well, when they talk about "EBITDA Multiple Expansion" does that mean another way for the IRR to increase...
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