LBO Modelling

Pricing

Cost for BPP PD Members: £540.00 + VAT : 6 CPD Hours
(£675.00 + VAT for non BPP PD Members - Click here for details of our membership scheme.)

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Course level

Intermediate

Delegates

Delegates should have a sound knowledge of Excel and fundamental accounting.

Course Content

During this one-day course delegates will construct a flexible model capable of analysing the suitability of a target business to a leveraged buy-out. Typical LBO constraints will be introduced and flexed to analyse the most appropriate structure to optimise sponsor returns. Through this process delegates will understand the dynamics and drivers of value in LBO transactions. Best practice financial modelling will be applied throughout.

Topics covered on this course will include

  • Identifying the Key LBO Success Factors
    • Length of investment
    • Exit routes – IPO, trade sale, secondary buyout, liquidation
    • Cash generation and profitability growth of business being acquired
    • Source, length and credibility of forecasts
    • Exit multiple growth
    • Finance mix
    • Typical profiles
  • Creating the Operating Model
    • Sales, EBITDA and working capital
    • Capex and depreciation – cascade vs. BASE calculations
  • Tax (including losses)
  • Sources and Uses of Funds
    • Uses of funds
      • Equity acquisition, refinanced debt, options, fees
    • Sources
      • Debt capacity
      • Debt/EBITDA multiples
      • Senior tranches
      • Mezzanine vs. High Yield vs. vendor notes
  • Building the Debt Schedules
    • Circularity issues – planning to avoid
    • Amortising vs. bullet tranches
    • PIK interest
    • Revolver
    • Key outputs
  • Equity Return
    • IRR and cash/money multiple
    • Value creation profile
    • Sales growth vs. margin vs. deleverage vs. exit multiple arbitrage
    • Coverage ratios and repayment profiles
  • Quality Control in Models
    • Error flags if repayments not covered, revolver drawn, covenants breached

Course Dates

Location Dates Time Availability  
London 09 May 2020 9:00 AM - 5:00 PM  Spaces Book Now
London 18 Aug 2020 9:00 AM - 5:00 PM  Spaces Book Now
London 15 Nov 2020 9:00 AM - 5:00 PM  Spaces Book Now

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