OfficeHours

JUNE 6, 2023

Leveraged buyouts involve acquiring a controlling interest in a mature company, typically through a combination of equity and debt financing, using the acquired company’s assets as collateral to secure debt financing. Private equity firms also invest in distressed debt or provide private debt financing.

Private Equity 147

Private Equity Equities Debt Investment 147

OfficeHours

AUGUST 7, 2023

When we refer to a case study here, I am referring to a situation in which you are given a CIM of a sample company and asked to create an LBO model as well as formulate thoughts on this company as a potential investment opportunity given what is presented in the CIM. and formatting for numbers, dollars, and percentages.

Investment 130

Investment Business Underwriting IT 130

How2Exit

NOVEMBER 25, 2024

Financial institutions, through methods like industrial revenue bonds and mezzanine loans, present existing CEOs and potential entrepreneurs with creative funding structures to support roll-ups. Many acquisitions are funded through a blend of debt financing, seller financing, and equity rollovers.

Business 130

Business Mergers and Acquisitions Finance Finance 130

OfficeHours

JUNE 5, 2023

Balancing debt and equity components are crucial to minimizing the cost of capital while maintaining financial flexibility. In general, this focus on cash flow will enable timely debt servicing and can allow the acquired company to bounce back stronger than ever before being taken public or spun off to another private equity firm.

Private Equity 147

Private Equity Valuation Equities Debt 147

Francine Way

JULY 13, 2017

Calculating cost of debt, cost of equity, and weighted average cost of capital (WACC). Determining the year-by-year future non-equity claims from the latest 10-K, especially those that will occur during the forecast horizon, and their combined present value. Enterprise Value = Market Capitalization + Total Debt - Total Cash.

Valuation 130

Valuation M&A DCF Book-building 130

How2Exit

AUGUST 12, 2024

Financial Preparedness: The episode highlights the critical need for comprehensive financial planning, especially when leveraging debt for acquisitions. Sound Financial Management: Balancing Debt and Growth An essential theme from the conversation revolves around the principles of robust financial management.

Business 130

Business Acquisitions Mergers and Acquisitions Debt 130

OfficeHours

JUNE 6, 2023

Naturally, proficiency in Excel is of the utmost importance, but ensuring you understand the right financial model is equally important; be sure to practice your paper LBO and Excel debt-focused models through courses to give yourself an edge. Understand the Firm Research the private equity firm thoroughly.

Private Equity 147

Private Equity Equities Financial Models Financial Modeling 147

Lake Country Advisors

AUGUST 8, 2024

Discounted Cash Flow (DCF) Analysis Discounted Cash Flow (DCF) Analysis is a valuation method that estimates the value of a company based on its projected future cash flows, which are then discounted to their present value. DCF is particularly useful for valuing startups or companies with predictable cash flow patterns. million + $1.65

Valuation 97

Valuation Discounted Cash Flow S&P DCF Analysis 97

Presser & Co

MAY 22, 2023

Put simply, enterprise value = equity value + debt – cash. As a result, you can have two identical companies that have the same enterprise value, but may not have the same equity value, because of the existence of debt or excess cash on either of their respective balances sheets.

Equities 52

Equities Debt M&A Shares 52

Mergers and Inquisitions

MAY 29, 2024

Project Finance Definition: “Project Finance” refers to acquisitions, debt/equity financings, and new developments of capital-intensive infrastructure assets that provide essential utilities and services. However, many people also use the term more broadly to refer to equity, debt, and advisory for infrastructure assets.

Corporate Finance 59

Corporate Finance Financial Modeling Financial Models Finance 59

Wall Street Mojo

JANUARY 15, 2024

wallstreetmojo.com) Balance Sheet The Balance Sheet A balance sheet is one of the financial statements of a company that presents the shareholders' equity, liabilities, and assets of the company at a specific point in time. Liabilities come next, divided into current liabilities (like debts and payables) and long-term liabilities (e.g.,

Accountant 98

Accountant Financial Statement Debt Financial Models 98

Mergers and Inquisitions

MAY 3, 2023

And it values the company today based on the present value of its dividends and that potential future value (either the stock price or the Equity Value via the Terminal Value calculation). The DDM is more grounded because it’s based on the company’s actual distributions and potential future value.

Valuation 64

Valuation DCF Debt Financial Models 64

Shearman & Sterling

DECEMBER 8, 2021

As to three others, plaintiff alleged that their service on the audit committee presented a substantial likelihood of liability because it was charged with reviewing conflicted transactions. There was no dispute that two of the nine board members were disinterested and independent.

Debt 52

Debt Sale Equities Investors 52

Beyond M&A

OCTOBER 22, 2024

I empathise that in some firms, the technology leader has minimal input into a deal but if you can present issues constructively , and not like an IT person, please help the rest of us in the tech idnsutry by calling it out. Code Quality and Technical Debt Good code should be clean and scalable. Hint: those assumptions are often wrong!

M&A 130

M&A Mergers and Acquisitions Architecture Debt 130

How2Exit

MAY 20, 2024

This conversation dives deep into the precarious practice of over-leveraging in business acquisitions and the perils it presents for entrepreneurs. He elucidates on the market dynamics, contrasting the more natural debt-equity structures of large companies with the often artificially stimulated small business sector.

Business 130

Business Book-building Equities Acquisitions 130

Mergers and Inquisitions

OCTOBER 30, 2024

But I want to be fair, so I will present their positives and negatives here. Treasury is more important in an industry like commercial banking ( FIG ) than in industrials or consumer/retail because banks constantly issue Debt and Equity and change their Dividend and Stock Repurchase policies to comply with regulatory capital requirements.

Corporate Finance 105

Corporate Finance Finance Finance Corporation 105

Sun Acquisitions

NOVEMBER 7, 2022

The long and short is yes, it’s possible, however, there’s a series of considerations from the Small Business Administration (SBA), the holder of your PPP loan debt that you need to comply with. You want to be free of this debt as soon as possible. Perhaps you’ve asked, “Can I sell my business if I got a PPP loan?”.

Business 98

Business Mergers and Acquisitions Sale Debt 98

Software Equity Group

JUNE 14, 2023

First, it’s important to understand that most M&A transactions are completed on a cash-free, debt-free (CFDF) basis. This means the seller keeps all cash remaining on their balance sheet at closing time and must pay off all long-term or interest-bearing debt. These accounting intricacies, as it turns out, are open to negotiation.

M&A 93

M&A Capital Negotiation Accountant 93

Francine Way

JUNE 22, 2020

I learned a few new things in these 2 roles, including how to evaluate a merger opportunity and present it to a corporation’s Board of Directors (BoD). A template presentation deck - based on a real merger case - will be presented here to showcase concepts and thought processes. Any debt drawdown and paydown schedule.

Valuation 130

Valuation M&A Mergers Mergers and Acquisitions 130

Cleary M&A and Corporate Governance Watch

JANUARY 29, 2024

Either way, it is likely that a significant number of companies, across industries, will need to restructure their financial debt and operations. As 2023 concludes, economic indicators remain mixed on whether there will be a recession or a soft landing over the next year. To read the full post, please click here.

Economics 52

Economics Debt Healthcare Management 52

Wall Street Mojo

JANUARY 14, 2024

The Allowance Method in accounting sets aside funds to cover anticipated bad debts from credit sales. It aligns bad debt expenses with sales within the same reporting period, ensuring a more realistic portrayal of a company’s financial health. What Is The Allowance Method? Example #1 Suppose ABC Inc.,

Accountant 52

Accountant Debt Financial Statement Risk Assessment 52

Francine Way

JULY 11, 2017

Discounted Cash Flow (DCF) i s a valuation method that uses free cash flow projections, a discount rate, and a growth rate to find the present value estimate of a potential investment. Assumptions about the debt portion of the proposed transaction: Remember that LBOs are heavily financed with short-term loans (revolver, etc.),

Valuation 130

Valuation M&A DCF Financial Statement 130

Focus Investment Banking

APRIL 7, 2024

Cost of Leveraged Buyouts: PE firms often use leveraged buyouts (LBOs) to acquire companies, relying heavily on debt financing. Lower interest rates make this debt cheaper, enabling PE firms to execute more buyouts or bid higher for target companies. This market trend can raise the comparative value of similar businesses.

Private Equity 52

Private Equity Valuation Equities Business 52

Sica Fletcher

MAY 8, 2020

If you're a retailer with less than a 25-30% margin, these figures present a good reach goal to shoot for. That is, for every $1 of EBITDA they have $6 of debt. billion of debt given the 6.0x Yet, BRO shows a net debt of only $1.5 For more details, see BRO’s Q1 presentation. 2019 EBITDAC of $717 million.

Insurance 52

Insurance Retail Debt Broker 52

Francine Way

JULY 7, 2017

Thus far in the last 10 blog posts, we have discussed what M&A is, its success metrics, types of acquirers and value creations, capital structure, debt, and equity. Due to transaction-fee compensation structure, consultants may not have their client’s best interest and present unfavorable deals just to do a deal.

M&A 130

M&A Acquisitions Consulting Capital 130

Software Equity Group

MARCH 21, 2023

There are several resources for growth capital: debt from a lender or financial institution, minority equity financing, or majority equity financing through a control transaction. Growth debt, also called venture debt, most often comes as a principal loan accompanied by an interest payment.

Finance 52

Finance Finance Debt Equities 52

Mergers and Inquisitions

SEPTEMBER 11, 2024

Renewable Energy Investment Banking Definition: In renewable energy investment banking, bankers advise companies in the solar, wind, biofuel, storage, battery, smart grid, electric vehicle, hydrogen, hydroelectric, and carbon capture verticals on equity and debt issuances, asset deals, and mergers and acquisitions.

Investment Banking 59

Investment Banking Bank Banking Investment 59

Focus Investment Banking

JANUARY 28, 2024

The younger partners were presented with a dilemma: They could each increase their stakes in the business and collectively control it but would have to take on—and be personally liable for—the $25 million in debt. It would take years before the debt could be paid down. Such a loan would, of course, entail personal guarantees.

Professional Services 52

Professional Services Sale Private Equity Debt 52

Wall Street Mojo

JANUARY 4, 2024

read more is that amount of interest, which is due for a debt or bond but not paid to the lender of the bond. Similarly, a company that has debts in its books will have to report the amount of interest accrued for the bonds it has lent. Still, the same is not received or paid in the same accounting period.

Accountant 98

Accountant Financial Models Financial Modeling Financial Statement 98

Shearman & Sterling

DECEMBER 8, 2021

As to three others, plaintiff alleged that their service on the audit committee presented a substantial likelihood of liability because it was charged with reviewing conflicted transactions. There was no dispute that two of the nine board members were disinterested and independent.

Debt 40

Debt Sale Equities Investors 40

Wall Street Mojo

JANUARY 4, 2024

A prompt is a scenario presented by interviewers to a candidate. In its essence, this test requires candidates to determine and present a deal’s profitability in a few minutes, armed only with a pen and paper. Keeping these assumptions simple is essential to ensure the coherence and credibility of the model being presented.

Debt 52

Debt Private Equity Mergers and Acquisitions Investment 52

Sun Acquisitions

APRIL 17, 2024

Clean Up Your Financials Apart from organizing financial documents, it would help to clean up your financials by minimizing unnecessary expenses and debts. Reducing excess debt can make your business more attractive, improving your balance sheet and cash flow.

Mergers and Acquisitions 59

Mergers and Acquisitions Business Mergers Acquisitions 59

Sun Acquisitions

APRIL 10, 2024

Clean Up Your Financials Apart from organizing financial documents, it would help to clean up your financials by minimizing unnecessary expenses and debts. Reducing excess debt can make your business more attractive, improving your balance sheet and cash flow.

Mergers and Acquisitions 59

Mergers and Acquisitions Business Mergers Acquisitions 59

Sica Fletcher

JULY 11, 2024

We split the averages presented below according to insurance industry subsectors and brokerage sizes to provide a more accurate estimation of multiples. However, it does present some serious opportunities for those attempting to maximize their overall benefit from the transaction. Equity used to consist of senior debt (i.e.,

M&A 52

M&A Insurance Debt Equities 52

Wall Street Mojo

JANUARY 15, 2024

The present value of the minimum lease payments is $35,000, while the equipment’s fair value is $50,000. Let us calculate the debt value of the lease payments as follows, Debt value of lease payments = PV of lease payments in year 1, year 2 and year 3 = $1,500 / (1 + 5%) 1 + $1,000 / (1 + 5%) 2 + $1,000 / (1 + 5%) 3 = $3,199.4

Accountant 98

Accountant Financial Models Financial Modeling Valuation 98

Cooley M&A

JULY 28, 2022

In the US, it is common to adjust the purchase price for cash, any excess or deficit of net working capital relative to a required level of net working capital, unpaid debt, and unpaid transaction expenses of the target business as of the closing, with an adjustment done at closing based on estimates and followed by a post-closing true-up.

M&A 59

M&A Debt Accountant Business 59

Focus Investment Banking

MARCH 10, 2025

Optimize Working Capital (One Year Ahead) What It Is: Net Working Capital (NWC) is Current assets minus current liabilities (A/R + Inventory A/P + Accrued Expenses), excluding cash, which you keep (in a typical cash-free, debt-free transaction). Why It Matters: Healthy working capital keeps the business running smoothly day-to-day.

Investment 52

Investment Book-building Sale Business 52