Overview
Principles of LBO valuation will be covered and participants will build a short-form LBO model. How private equity firms create value and the unique attributes of LBO valuation are examined.
- How LBO’s and private equity firms create value
- What makes a good LBO candidate
- Common valuation drivers
- Buyer’s return requirements
- Availability of leverage in credit markets
- Sustainable company cash flows for debt repayment
- Ability of buyer to achieve operating synergies
- Exit opportunities (sale or IPO)
- Building a flexible sources and uses of funds table
- Determining debt capacity
- Calculating the exit value
- Calculating the IRR and deriving football field valuation range
- Sensitivity analysis