LBO Model, Loan Structuring,
Pricing and Leveraged Acquisition Finance.
January 2023
Sandton Johannesburg South Africa
Register Now! Limited Seats Available!
R19, 999.00 Per delegate
Course overview:
What is ‘LBO’? Leveraged Buyout (LBO) is a financial transaction wherein a company is acquired using equity and debt. An ‘LBO Model’ is an Excel-based model used to evaluate LBO transactions. Assets of both companies (the acquired and acquiring) act as loan collaterals.
In most cases, the acquiring company prefers to invest the least amount of equity and fund the rest with debt and non-equity sources. The LBO model primarily aims to enable investors to accurately and thoroughly assess transactions and earn the highest possible risk-adjusted internal rate of return (IRR). The investment decision is with the main aim of making most returns on its equity and using debt to increase potential returns.
This training will empower you with detailed information about an LBO model. Since this is a critical model that could define a company’s success or failure in terms of its financial assets and returns, knowledge and experience of all aspects of LBO, including loan structuring, pricing and leveraged acquisition finance, will reduce risks of financial loss to either party. Through this course, you will acquire the skills and capabilities to assist organisations in making the most of the LBO model.
Course Objectives:
The key objective of this training course is to empower professionals to—
- receive a comprehensive understanding of LBO and LBO models to assist one’s organisation in successfully conducting such transactions
- evaluate, on behalf of one’s organisation, requests for various methods of finance for LBO transactions, thereby establishing oneself as a dependable, credible employee
- review and structure loans effectively to minimise risks and maximise benefits
- analyse important factors and recommend strategies for LBO transactions to be undertaken by one’s organisation
- prepare and structure project finance contracts covering all applicable clauses and risks, thereby protecting one’s organisation against any risk or financial loss, in turn proving one’s talent and gaining greater growth opportunities
- examine current systems within one’s organisation and present reports on its actual financial position and capability to conduct such transactions
- take strategic steps at an organisational level to overcome any financial loss worrying the organisation, in turn contributing to organisational development
- acquire relevant multitasking skills and superior knowledge to handle multiple facets of LBO transactions, thus giving one the confidence to successfully take up roles across any organisation, fostering faster career progression
- mentor other professionals on important theories and practices related to LBO transactions
Targeted Audience:
- Senior management intending to make considerable investments and acquiring other companies
- Managers, leaders and executives involved in functions related to LBO transactions
- Legal and financial advisors of organisations performing their respective roles for organisations
- Compliance officers checking and ensuring adherence to all rules and regulations
- Fund managers and treasurers with a specific responsibility of managing safety and effective use of bank funds
- Any other professional interested in knowing more about LBO transactions, specifically the LBO model and its related concepts
Course Outline:
Characteristics of LBOs
- Stable cash flows
- Relatively low fixed costs
- Relatively little existing debt
- Valuation
- Strong management team
Components of an LBO Capital Structure
- Bank debt
- High yield debt/subordinated debt
- Mezzanine debt
- Equity
- Credit metrics
- Sponsor internal rate of return
Steps to LBO Modelling
- Assumptions
- Financial statements
- Transaction balance sheet
- Debt and interest schedules
- Credit metrics
- Discounted cash flow/internal rates of return
- Sensitivity analysis, charts and graphs
Key Credit Metrics in an LBO Model
- Debt/EBITDA
- Interest coverage ratio
- Debt service coverage ratio
- Fixed charge coverage ration
Historical Financial Statements
- Income statement
- Balance sheet
- Cash flow statement
- Supporting schedules
- Goodwill and purchase price allocation
Forecast Financial Statements
- Forecast setup
- Income statement
- Balance sheet
- Supporting schedules
- Cash flow statement
Strategies for LBO Financing
- Seller financing
- Equipment financing
- Own funds
- Senior debt
- Subordinated debt
- Mezzanine debt
Characteristics of Leveraged Loans
- Principal amortization
- Secured
- Floating rate
- Term
- Covenants
- Private
- Prepayment
Loan Structuring
- Purpose, term and repayment matching
- Loan documentation
- Loan agreements and covenants
- Interest rates and fees
- Pricing for risks
- Linking price and risk to capital adequacy
Acquisition Finance
- Mergers and acquisitions
- Target company valuation
- Acquisition financing through equity and debt
- Mezzanine finance
- Paper finance
- Shareholder impact
End of the workshop
IN HOUSE AND ONLINE TRAINING
While both In-House and Online training can present with cost-effectiveness and time-efficacy, there are some very specific differences between in-house courses and those based online.
The demand for additional courses by individuals or groups of people is increasing. Still, it depends entirely on the preferences of a person what type of training he or she wants to receive. Online courses and in-house training carry some similarities but they are considered to exhibit some very pivotal differences too. Despite that, both types of learning can be really beneficial for attendees.
For Registration and other Training arrangements,
contact us on the detail below.
SOUTH AFRICA : +27 11 057 6001
TANZANIA Cell: +255 769 688 544
WhatsApp +27 79 574 0389
info@bmktraining.co.za / www.bmktraining.com
