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LBO Modeling

COURSE
Wall Street Prep
5 hrs

LBO Modeling

COURSE
Wall Street Prep
5 hrs
Included in GO1 PremiumStarting from $12 per user for teamsLearn moreTry for free
Included in GO1 PremiumStarting from $12 per user for teamsLearn moreTry for free

Course Overview

Leveraged buyout (LBO) modeling is used widely by investment banks and private equity firms and is often part of a finance interview. In this course, you will learn how to build a real, complex LBO model from scratch.  You will start by learning about basic LBO concepts, typical deal structures, and current industry dynamics. You will then begin the step-by-step modeling, covering the most common and challenging issues that emerge when modeling buyouts. The course concludes with a sensitivity and scenario analysis, as well as how to build output tables that are key to any professional-grade LBO analysis.

Instructor - Matan Feldman

Matan Feldman is Wall Street Prep’s Founder and Managing Partner. His responsibilities include business development, development of courses, and overseeing training programs. Matan has overseen training programs for clients including Morgan Stanley, Credit Suisse, Raymond James, Stifel Nicolaus, FBR Capital Markets, Sagent Advisors, Giuliani Capital Advisors, JP Morgan, Cerberus, Wharton Business School, London Business School, Kellogg, Booth, Stern (NYU), and Cornell. Prior to founding Wall Street Prep, Matan served in several capacities on Wall Street — first as an Analyst in Chase Manhattan Bank's Mergers & Acquisitions Group in New York, and subsequently as an Associate within JP Morgan's Equity Research Group, covering Food & Drug Retail Equities.

Learning
CHAPTER 1: LBO BASICS
Welcomevideo • 1 min
Introduction to LBOsvideo • 8 mins
Working Through the Dell LBO on a Cocktail Napkin, Part 1video • 9 mins
Working Through the Dell LBO on a Cocktail Napkin, Part 2video • 6 mins
What makes a good LBO?video • 5 mins
Current LBO Environment, Part 1video • 8 mins
Current LBO Environment, Part 2video • 10 mins
Current LBO Environment, Part 3video • 7 mins
Tax savings in LBOsvideo • 4 mins
Tax Reform Impact, Part 1video • 4 mins
Tax Reform Impact, Part 2video • 5 mins
LBO Capital Structure - Equityvideo • 5 mins
LBO Capital Structure - Debtvideo • 8 mins
Term Loans & the Revolver, Part 1video • 7 mins
Term Loans & the Revolver, Part 2video • 8 mins
Bondsvideo • 6 mins
Covenantsvideo • 5 mins
Mezzanine Financing & Bridge Loansvideo • 4 mins
Extended Dell LBO on a Cocktail Napkin, Part 1video • 3 mins
Extended Dell LBO on a Cocktail Napkin, Part 2video • 7 mins
CHAPTER 2: THE STRUCTURE OF PE FIRMS & INVESTOR DYNAMICS
Dry Powdervideo • 3 mins
How PE Funds Workvideo • 8 mins
GP vs. LP Dynamicsvideo • 6 mins
Tax Reform Impact on the Structure of PE, Part 1video • 6 mins
Tax Reform Impact on the Structure of PE, Part 2video • 5 mins
Whole-Fund vs. Deal-by-deal Distribution Modelvideo • 3 mins
Distribution Waterfall Exercise, Part 1video • 11 mins
Distribution Waterfall Exercise, Part 2video • 4 mins
CHAPTER 3: MODELING A REAL LBO
Case Study Introduction: The Leveraged Buyout of BMCvideo • 6 mins
General Inputsvideo • 6 mins
Initial Valuation: Offer Price vs. Enterprise Valuevideo • 10 mins
Diluted Shares, Part 1video • 13 mins
Diluted Shares, Part 2video • 6 mins
Sources and Uses of Funds, Part 1video • 14 mins
Sources and Uses of Funds, Part 2video • 10 mins
Creating the Historical Income Statementvideo • 14 mins
Forecasting the Income Statement, Part 1video • 8 mins
Forecasting the Income Statement, Part 2video • 9 mins
Forecasting the Income Statement, Part 3video • 4 mins
Forecasting Accounts Receivablevideo • 7 mins
Forecasting Other Working Capital Itemsvideo • 11 mins
Preparing the PP&E Schedulevideo • 11 mins
Preparing the Software Development Costs, Intangibles and Goodwill Schedulesvideo • 10 mins
Forecasting PP&Evideo • 8 mins
Forecasting Software Development Costsvideo • 3 mins
Forecasting Intangibles, Goodwill, Other Assets & Other Liabilitiesvideo • 6 mins
The Cash Flow Statementvideo • 8 mins
Cashvideo • 5 mins
Interest Income and Circularityvideo • 6 mins
Modeling the Revolvervideo • 9 mins
Modeling Required Debt Amortizationvideo • 7 mins
Modeling Cash Sweepsvideo • 13 mins
Modeling the Revolver Borrowing Base Compliancevideo • 6 mins
Modeling PIK Debt & Preferredsvideo • 5 mins
Capitalized Financing Feesvideo • 3 mins
Modeling Interest Expensesvideo • 17 mins
Completing the IS and CFSvideo • 3 mins
CHAPTER 4: LBO EXIT & RETURNS ANALYSIS
Model Review and Introduction to Exit Analysisvideo • 6 mins
Enterprise Value at Various Exit Multiplesvideo • 8 mins
Exit Equity to Sponsors & Management, Equity Kickers to Mezzvideo • 8 mins
Returns to Senior Debtvideo • 9 mins
Returns to Sub Debtvideo • 6 mins
Modeling IRRs and Cash-on-Cash Returnsvideo • 4 mins
Creating an LBO Summary Tablevideo • 7 mins
CHAPTER 5: SENSITIVITY ANALYSIS
Modeling Hurdle Rate Sensitivityvideo • 12 mins
IRR Sensitivity to Leverage and Valuationvideo • 8 mins
IRR Sensitivity to Mezz Debt Termsvideo • 12 mins
Modeling Reviewvideo • 14 mins
CHAPTER 6: PRO FORMA BALANCE SHEET ADJUSTMENTS
Setting up the Historical Balance Sheetvideo • 7 mins
Adjusting the Balance Sheet to Reflect the LBOvideo • 12 mins
Modeling LBO Goodwill and a Recap Togglevideo • 4 mins
Pro Forma Balance Sheet (PFBS) Historicalsvideo • 3 mins
Forecasting PFBS Assetsvideo • 5 mins
Forecasting PFBS Liabilities and Equityvideo • 12 mins
Post-2015 financing fee rules in LBO modelsvideo • 13 mins
Goodbyevideo • 1 min
APPENDIX I: DIVIDEND RECAPS
Appendix I.I Understanding BMC's Dividend Recapvideo • 5 mins
Appendix I.II Adjusting the Model for BMC's Dividend Recap and PIK Toggle Sub Debtvideo • 4 mins
Appendix I.III Alarm Over Dividend Recapsvideo • 4 mins
APPENDIX II: ADVANCED PURCHASE PRICE ALLOCATION MODELING
Appendix II.I Modeling Asset Write Upsvideo • 8 mins
Appendix II.II Asset Sale (338)/Stock Sale Toggle and DTLsvideo • 8 mins
Appendix II.III Impact on the IS and CFSvideo • 9 mins
Appendix II.IV Impact on the Balance Sheetvideo • 6 mins
APPENDIX III: ATTACHING A DCF ANALYSIS TO AN LBO MODEL
Appendix III.I Attaching a DCF Analysis to the LBO Modelvideo • 11 mins
APPENDIX IV: KKR LBO OF BMC IN 2018
Appendix IV.I What the KKR deal tells us about likely actual IRRsvideo • 11 mins
APPENDIX V: DEBT DEEP DIVE
15. Appendix V.I Leveraged Finance: Debt Deep Divedocument
Supplementary Materials
Course Manualdocument
Supporting Documents Kittext