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URGENT HELP PLS LBO MODEL NOT BALANCING
Hi All -- I have a 24hr case study coming up and I'm trying to get a template set but my model isn't balancing. It's a mezzanine tranche of debt that is throwing it off bc when removed everything is perfect. Anyone available to take a quick look, I can dm the model. Really really appreciate it!!!!!
LBO Modelling questions (Debt Schedule)
How do you usually structure the debt schedule? I think the clearest way to go about it is to structure it as follows: CF Available for debt service Debt 1 (BOP, repayment, EOP, interest) CF Available for debt service of second tranche Debt 2 (BOP, repayment, EOP, interest) CF after debt servicing /...
Can you use your target company's own cash to fund a leveraged buyout?
I am looking at this M&A model, and it says that a certain percentage of the cash used in the leverage buyout is coming from the target companies own balance sheet. What is the logic behind this? How can you use a company's own money to buy itself?
CONSULTANTS: How did you prepare for LBO modeling tests?
Also, did your interviewees ever provide a template for the test? If so, how detailed was it? (I've heard of some firms providing candidates with consulting backgrounds a template to work off of in the test.)
Solved 'WSO Basic LBO Example New' Model??
Hi All-- Odd request here. A week or three I came across an empty model called "WSO - PE Guide - Basic LBO Example-New." The prompt starts: "Company JKL was taken private by MNO four years ago. As they are approaching the end of their hold period, they have started an auction process to sell the...
Loan and revolver quantum & cost
Hi, Say a company wants to refinance existing debt on the back of $40m EBITDA as its situation has improved over the past 3 years. - Could a lender extend a Unitranche loan based on Ebitda leverage covenant + revolver based on A/R? - If so: what metrics would the lender use to assess the quantum &...
Questions about LBO share price
When inserting an LBO valuation into a football field graph; how do you get to the lbo share price range (min and max)? It doesn't make sense to me to enter the entry equity value divided by # of shares since the capital structure is mostly made out of debt, do enter the exit equity value? I can't...
Chess for finance
I'm a PE associate looking to further my chess game - currently about 1100 blitz on chess.com. Teach me chess and I'll share all I know about recruiting, IB , PE . This is for NYC . :)
Modeling Test: Option Pool Question
Hi All- I’ve been working through some of the WSO LBO modeling tests from the PE guide. My question relates to the Basic LBO 2 model and the option pool. There is a dividend recap at the end of year 3 and the sponsor exits in year 7. A management option pool is exercised on exit. The formula for...
IB - LBO Modeling Test
Hey All - I recently got through a couple rounds at a EB and now have to complete a 2-Hour LBO modeling case study to get into the final round. This is for a lateral analyst position and inclusive of both the Excel model and a write-up. I was wondering if anyone has gone through a similar process...
Build LBO model from scratch for case study
Hello all - I need to build an LBO model from scratch as part of a case study. I will have 3 hours to complete this, remotely. I am a decent modeler, I don't need a modeling course or anything, but I would like to review resources to brush up on building an LBO model from scratch, can anyone suggest...
3 statement modelling test for IBD SA
Hello I have an upcoming superday with an M&A boutique. Part of it involves making a 3-statement Excel model in 1 hour using some given assumptions. My background is finance but ive never made a 3-statement model using Excel before. Does anyone have any advice on what i should focus on...
Calculate debt capacity
Hi guys, Quick questions for the pros ;) are there any good resources to learn about the various debt instruments and how to model them in a M&A / LBO context? also: do you guys know how to calculate debt capacity for a company? We are offered a step down unitranche over a period of 7 years in USD....
Preparation for 2 hour LBO modelling test
Hi all Invited to an AC for a boutique advisory focusing on aerospace and defense (in London). Told that i will be doing a 'simple' 2 hour modelling test on Excel that is likely to be either an LBO or Merger Analysis test. Have only ever done DCFs on Excel before and even though i know the theory...
Can anyone help with LBO modeling? "How do you account for the "bonus" depreciation in an LBO?
This is for all the modeling pros out there who can help. In a full 3-statement LBO model, how do you take into consideration the "bonus" depreciation until 2023 introduced by the tax reform? (i.e., 100% of Capex incurred) From what I understand, GAAP depreciation was not affected so the Income...
ASKIVY.NEt
Curious to know if anyone has/used askivy.net 3 hour LBO case study and if you still have model answers
NewCo LBO
Hey Guys, Hope everything is well. I just have a quick question regarding LBO structure. When you create the usual LBO structure (PE fund and debt provider -> NewCo holding -> target company), i’m Not clear about the NewCo part. Should the NewCo EV be the Target EV or the Target Equity Value?...
LBO structure : common + preferred stocks questions
Hi guys, The company I work in is currently looking into buying a small event/marketing business. The idea would be to buy it from the existing owner and let a few incentivized guys from the management run it (as it is profitable). Someone mentioned to us that it would be better to have a...
Bifurcate the equity structure: questions
Hi guys, The company I work in is currently looking into buying a small event/marketing business. The idea would be to buy it from the existing owner and let a few incentivized guys from the management run it (as it is profitable). Someone mentioned to us that it would be better to have a...
Need some help for my thesis on LBO's
Hi, I am currently working on my thesis regarding the European and especially the German LBO market. I am basically looking for a closed LBO deal that has the most information publicly available so I can analzye the deal as thoroughly as possible. I currently use CIQ as my database. I found out that...
How to become the best analyst in my IBD department
I have a "simple" question - how do I become the absolute best analyst at my bank, or at least my department? What I do so far: - I keep a list of to me previously unknown things and words (process and finance related as well as English vocab, being a non-native English speaker) - Always ask...
Any experience w/ LBO or M&A of a Traditional Asset Manager by a PE Firm?
Hi all, I couldn't find much relevant materials on-line so I thought I'd post here. I'm in IB and a PE client is interested in (preliminary) discussions regarding a potential acquisition of a traditional asset manager (mainly equities and some fixed income). No talks regarding structure (i.e....
MS Sr. 4.05 GPA rejected from top preps - are my IB aspirations toast?
Hey guys, 1st real post here only bc I'm panicking here tbh. Lurked around since kindergarten when I made a throwaway to counter some guy's views during the euro banking crisis (2011). So I've been wanting to break into IB without my PE dad's help for the longest but I got a pretty bad deleverage...
The most advanced financial modelling course
I'm looking for the most advanced financial modelling online course (M&A, DCF and LBO), and by that i mean: * it should be case based * go deep into certain topics not covered in usual modeling courses (taxes, NOLs , PP&E schedules, etc.), * deal structures (insight into the +/- of various deal...
Advice for Bank Job
Hi guys, I go to a school that is ranked 45-40. I have had two real estate internships and I want to break into banking. I went from a 2.87 gpa for my first 2 years to 3.27 gpa that I round to a 3.3 on my resume. I am not qualified enough for an analyst position realistically, even though I am very...
Is this still considered a LBO?
Is it still considered a LBO if a public corporate acquires another corporate (private) using 100% debt? I know the term LBO is typically used in the context of a sponsor using a significant amount of leverage to acquire a company, but wasn't sure if LBO could also just be used as a highly leveraged...
LBO Model Practice
Can I get some feedback on my new web-based LBO model, sharpelbows.co ? To my knowledge, this is the first of its kind, and my hope is that its helpful for IB Analysts, MBAs , and others to get quick directional guidance on an investment case. Looking for feedback on utility, scope, veracity, and...
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...
LBO: Debt Free Cash Free Quick Q
Quick question. In an LBO model in which you assume debt free and cash free case, how do you adjust existing debt and cash for the PF adjustment? For example, your target has 300 of cash on BS and 5000 of debt on BS in 2017, you want to adjust by recording -300 and -5000 in the adjustment to get 0...
TRP Capital Partners
TRP Capital Partners ("TRP") seeks to make growth oriented investments in the transportation sector . TRP capitalizes on its strategic relationships, commercial synergies, and the transportation expertise of its partners and affiliates. Lower Middle Market Leveraged Buyout Fund.
Two layers of circular debt
Monkies, I am a first year real estate analyst at a large development firm in Miami, Florida. My modeling skills are from my perspective pretty good, I've learnt a ton from the senior guys at my office and I make models as a side gig for other real estate investors and developers. I create models...
How to reach out to Mezzanine Debt Lenders?
My firm is talking with a potential client for M&A advisory. They sound like they want an MBO, but I've only seen outside firms buy other companies. I know this will probably be a leveraged buyout and I've seen that process, but I don't know about the potential need for mezzanine lending. How do you...
Sponsors Paying for Lender's Legal Fees
Is it market for Sponsors to pay the legal fees of their lenders? Every deal I have seen is set up that way. It seems like a stupid norm. The Sponsor has to pay top dollar so an expensive law firm can defend the interests of the lender and actively negotiate against the sponsor! The lender is...
Impact of S&P Junking Staples
I wanted to start a discussion about the impact of S&P junking Staples after Sycamore's major buyout. I'm no finance expert, so interested in hearing others, but it sounds like Staples is no longer viewed to have such neutral-to-positive prospects in light of competition/low customer switching...
Paper LBO Timing
Hi guys, For those of you who've been through PE recruiting - how long does it typically take you to do a paper LBO (a full paper LBO , inclusive of all 5 year FCF calculation etc)? How long should you take? Is the interviewer just sitting in front of you the whole time waiting for you to finish?...
How are LBOs for companies trading at 30X EBITDA financed?
I work in the lower middle market space (commercial and industrials) where companies typically trade for 6-7x LTM EBITDA . These deals are typically financed with 3-4 turns of senior debt, a turn of mezz, and the rest funded via equity. How are LBOs of tech or public companies that trade over 30x...
LBO Related Question
I had a quick question on LBO : Bank Debt 5.0x Sub Debt 2.0x Total Leverage 7.0x I am practicing to build a model based on the above numbers. Do the leverage multiples indicate turn of leverage, which is Debt/ EBITDA ratio for each or simply 70% of the total capital stack above?
Please help! Having problems with cash sweep
Hi guys, I've been trying to practice my LBO modelling with Street of Walls' sample LBO case study practice and my cash sweep is not working properly. I don't have any formal IBD experience and have taught myself to model; I can build a basic integrated financial model quite comfortably but have...
Private Equity: How to Analyze a CIM Effectively?
All, I work at a middle-market fund (started about 8 months ago here) and wanted to learn from someone qualified (associate level or above) who works on the buyside what the best and most efficient way to analyze a CIM is (Confidential Information Memorandum, for those who're not aware is a 40-50+...
Real Estate Sale and Leaseback LBO
Hi all, I am currently looking at a target for a potential LBO . The target owns almost all of its retail stores and there have been suggestions of selling these stores to a REIT . Obviously, the stores would need to be leased back. I am no expert with real estate assets, so I was wondering, how to...
Need LBO Model Help
Hello Fellow WSOers, I am stumped thinking how I can about setting up the following LBO after being given a CIM: For sources and uses, assume a purchase of 65% of the company and a equity rollover equal to 35% of the purchase price. Assume leverage of 3.5x EBITDA in senior debt. The task is to build...
Cash on Balance Sheet after an LBO
Hello everyone, Here is a question about LBO that I have been thinking for a while. Let's say a company that has 100M cash and 400M debt on its balance sheet . Currently equity value is 700M. So... Enterprise Value = 700M + (400M - 100M) = 1B And we are going to use an LBO to buy the company with...
Elite Global Solutions LLP
Elite Global Solution is a investment consulting firm that takes pride on being the relevant platform where the investors and entrepreneurs come across each other. The investors and the borrowers are mutually profited through their service.
Mgmt Options Pool Calculation in Basic LBO Model Example
Hello, Can someone explain the theory behind the formula for cash out from mgmt options in the basic lbo model examples. The calculation is "new equity * [(mgmt %) / (1+mgmt%)]". Why do you need to divide by (1+mgmt%)?
Why So Many LBO Questions
I've had a couple interviews of various rounds (1st rounds at most BB ) as well as a few super days at MM and 1 BB , I've gotten tons of LBO questions? Why the shift from mostly DCF questions? BTW - some of the books on PE great primers on PE and will really help with LBO q's
LBO sources and uses
Hi all, I have a question relating to the sources and uses in an LBO-model. Let's take a hypothetical transaction (on a cash and debt free basis): Enterprise value: 100m Cash: 2m Debt: 10m --------------------- = Equity value: 92m The total debt can be specified into: Bank debt: 7m (must be...
Why is it controversial to finance a buyout with the target's cash?
So I heard an associate discussing how somebody should not build in the functionality in an lbo model that would allow the buyer (PE firm) to finance the transaction with the target's cash. Why is that? Don't you have a lot of cases where the market steps in and punishes the co for hoarding too much...
LBO model: reflecting an OID correctly
Quick technical question regarding the correct treatment of debt tranches with OIDs on the pro forma balance sheet . The precedents I have found within my team reflect the debt amount correctly, (i.e. less the OID on the PF balance sheet), but then appear to calculate goodwill incorrectly (i.e. the...
LBO of an Asset Manager
When PE firms purchase asset management firms , do they use leverage? Or is it a simply equity investment? Any other insight would be very helpful.
LBO Modeling Tests
How in depth are the modeling tests for PE interviews? I've heard that you generally get 30 minutes for a basic LBO without a BS and an hour for a more in-depth one that incorporates a full operating model. For example, how much time would you get for a modeling test like this one?...
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