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FINANCIAL MARKET COURSES

Corporate Valuation – Leveraged Buyout (LBO) Analysis

Leveraged buyout (LBO) analysis is used to determine the purchase price of a company by a financial buyer using high levels of debt financing. A transaction’s feasibility is conditioned upon various stakeholders being satisfied with their potential returns commensurate with the risks taken.

 

In this course, you will learn how to perform the mechanics of an LBO analysis. This includes determining the contemplated transaction’s implications for each of the stakeholders.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Identify the three primary LBO stakeholders (selling shareholders, equity investors, and debt holders), and outline their contrasting points of view

    Explain the concept of leverage and how it can boost investment returns

    Understand the various ways in which private equity investors create value and enhance investment returns

    Calculate the internal rate of return (IRR) of an LBO investment from the perspective of the private equity investor

    Determine the key financing parameters for banks, bond holders, and other capital providers

  • COURSE OUTLINE

    Topic 1: Overview of LBO

    What is an LBO?

    LBO Participants

    Topic 2: Funding the Acquisition

    Financing Structure

    Types of Debt

    Sponsor Equity

    Topic 3: Putting the Dynamics of LBOs into Perspective

    Motivations and Interests

    Topic 4: Measuring Success for the Financial Buyer

    Measuring Investment Performance Using IRR

    Deleveraging & leveraged Returns

    Techniques Used to Boost IRR

    Topic 5: Deleveraging & Maximising Value

    Deleveraging

    Operating Improvements

    Multiples Expansion

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    75 Minutes

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