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Introduction to the forum
Hi everyone, I'm currently working as an intern in a SGR in the risk management division, but I would love to join in a PE fund, in the investment team. I joined this forum to deepen my knowledge of selection processes in PE funds and to better prepare myself for interviews.
Can a VP Credit Risk lateral into PE?
Hey everyone. Credit Risk VP here. I'm at one of the top banks in the nation and manage a portfolio and underwrite new business for upper MM clients. I have an MBA from a respectable school and 10 years experience in what I do which consists of modeling, deal structuring, working on distressed...
Leverage for a Capex-intensive business
Currently preparing an LBO for a quite capital intensive business. EBITDA is roughly 40m USD but Capex and D&A is roughly 20m every year so EBIT or (EBITDA - Capex) is only 20m. Businesses in the industry are usually valued on an EBIT or (EBITDA-Capex) basis. My VP is maintaining that leverage for...
learn how to LBO in a day?
Interviewing for a lateral position next week and don't have a ton of experience with LBOs. I know what they are, why they're used, who good candidates of an LBO are, and can do a paper LBO, but I don't have much modeling experience. Is it possible to get proficient at it in a day? If so, do you...
Calculating cost of debt in LBO
Preparing an LBO for a PE firm and wanted to double check my cost of debt rationale. Targeting a 60/40 debt/equity mix Target Co to be acquired with 2 Term Loan B's Term Loan B #1 cost of debt = Libor + (target co interest expense/target co debt) Amortised evenly over life of loan Term Loan B #2...
Target Acquisition
Hi All: I am interested in Target Acquisition as in M&A and /or identifying LBO good targets. I worked for a niche consulting firm that specialized in acquisition target profiling, however, I careened into FP&A with a heavy data emphasis for last few years. My first love has always been target...
Difference in Comp between Traditional PE and Growth PE
Is there a difference in comp (amount and structure) between traditional PE groups and Growth PE groups in the same firm? Say TPG Capital vrs TPG Growth? And if there is, how wide is it and it which form?
Debt schedule modeling (simplified)
Hi guys. Having seen various ways of structuring a debt schedule I am still trying to find a simpler and more user friendly way of doing it without super long Min/Max formulas linking to all over the sheet (even for complicated cap structures w. PIK, dividend recaps, etc.). I would very much...
Credit Training Class
Hello - does anyone know of a credit training class I can take? I am unemployed and would like to apply for those types of jobs and willing to pay for a class to learn that.. Thanks, Amy
Sources & Uses - Cash Free / Debt Free LBO (picture included)
Hi all - Been trying to fully understand the sources & uses of CF/DF LBOs vs. Non-CF/DF LBOs. The picture is an example. Am I approaching this the right way? Thanks.
How can a Principal of a Bond Increase?
A company I'm looking at issued senior unsecured notes with a principal face value of $500mm. The principal face value recorded on its filings is $500mm. However, Bloomberg shows the principal amount of this issuance to be $537.12mm. Outside of a PIK feature (which this note doesn't have), is there...
LBOs - Why repay debt instead of keeping cash flow?
The M&I guide says that "using the company’s cash flows to repay debt principal and pay interest also produces a better return than keeping the cash flow." Is the intuition that the interest rate on the debt is always higher than the interest income you would get by keeping the cash? Would the...
Corp Dev LBO returns question: Levered and Unlevered IRR
Working on my first LBO case study for a Corp Dev/ M&A role. Firm has sent me a CIM and asked me to prepare 10yr Base Case projections to stress test: 1) Purchase Price, 2) EBITDA CAGR, 3) Exit Multiple, 4) Leverage. In showing the above sensitivity tables, they are looking for the resulting Levered...
Who finances LBO's? Is there significant money to be made as an LBO lender?
Hello Monkeys, I currently work in lending, and I'm wondering what the most valuable career path would be as a lender. Since so many LBO firms have made tremendous fortunes in the space, it made me wonder if the bank's financing the deals were also getting filthy rich? Would anyone know if LBO...
Sycamore Acquires Staples for $6.9 Billion in Largest Buyout of the Year
Sycamore Partners announced on Wednesday that it would acquire chain retailer Staples. Sycamore will pay $10.25 a share in cash for Staples, which finished trading Wednesday at $9.93. This price represents around a 20% premium from where the shares were trading in April, before it was announced by...
All debt buyout
Hi all - posting this in PE because I used to work in PE and you guys are better modelers than Corp types. Doing buyout model work for a firm that has a large revolver facility. They can do small to medium size deals of say $30-$150m entirely with revolver funds, so no equity check up front. How...
LBO Leverage - Rule of thumbs
Can anyone give me a rule of thumb for leverage levels to model during an LBO case study: How much senior debt; how much sub debt? Along with rates please
Potential LBO Candidates
Hey everyone, For my college finance class, I have to make an lbo model and investment thesis for a company of my choosing. I am starting my research and was hoping for some tips on companies that are prime candidates to be acquired right now. Thanks for your help
Leverage buyout modeling Question and Answer
Hi all, Just wondering if you guys have a sample for leverage buyout modeling. I would like to have a go at building the model from scratch and then have an answer to check against. Cheers :)
Financing an LBO with 95% Mezzanine Finance Structure?
I'm a "chimp", so consider me completely uneducated on the topic. Either case, I found a company that seems to have a lot of cash/equivalents and assets sitting on its books (approx ~3M cash, assets ~$1.5M, $1M in long term accounts receivable),With liabilities at ~2M. It is private, but I would...
Why is pre-LBO debt relevant for LBO suitability?
Often the argument seems to be made that a good LBO candidate has low debt, since this allows adding leverage. How relevant is this though if the old debt is completely retired and a new debt package is arranged for the buyout? If anything wouldn't it be advantageous if the company is already used...
Just earned my badge of honor. Not sure what to do now.
I work at a P.E. firm and had to pull off three days of near all nighters (19 hours, 21 hours, 21 hours). We were deep in the due diligence process for two firms while closing a deal on another, had several client meet ups, and a few "fun" operational things at our firm and one of our holdings. I...
338 (h) 10 election
Does anyone know of a company that was taken private and made a 338 (h) 10 election and, subsequently, went public a few years later? More so looking to find out if the 338 (h) 10 election held up during and after its transition to a public company (assuming they took credit for NOLs , etc). Thanks
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