PC Private Company Analysis

Description

Gain the skills required to analyze and value private companies with limited disclosure, illiquid and non-traditional ownership structures, and non-standard financials.

Learn to identify the key factors that drive valuation choices, avoid common pitfalls, and apply sound judgment in real-world scenarios.

This course equips finance professionals with the tools, techniques, and judgment needed to assess private businesses with confidence.

What you will learn

Day 1
Valuation - Core Concepts for Private Company Analysis
Valuation Fundamentals:

Overview of valuation methodologies and fundamental concepts
Critical valuation concepts including EBIT, EBITDA, and enterprise value
The bridge from equity value to enterprise value
Standalone value vs. value with control premium
Trading Comparables Fundamentals:

Calculating the company’s value:
Number of shares and value of share options
Equity value
Net debt calculations
Enterprise value
Calculating the earnings numbers:
Cleaning non-recurring items from earnings
Forward estimates & calendarization considerations
Last-twelve-months analysis
Calculating a range of forward-looking and historical earnings multiples:
Revenue
EBITDA
EBIT
Other value driver metrics
Excel Best Practices:

Navigating and highlighting
Copy and Paste
Paste special
Number formats – custom number formatting
Financial modeling essentials including appropriate color schemes
Fill commands
Formatting sheets
Building functions
Utilize “shortcut” keys and other efficiency tips
Customize the Quick Access Toolbar (QAT) in Excel
Best practices for building formulas (auto sum, etc.)
Absolute and relative references
Name cells
Audit formulas and cell references
Toggle between formula / value view
Practice key shortcuts using TTS Formatting Exercise

Day 2
Private vs. Public – What Changes in Valuation & Analysis?
Understanding the Private Market:

Differences between private and public company analysis
Internal and external sources of information
Financial Statement Analysis Issues:

Accounting issues and considerations for private companies
Adjusting financial statements for private companies
Valuation Issues – Overview:

Liquidity or marketability discounts
Valuation Issues – DCF:

Free cash flow issues and adjustments
Determining discount rates for private companies
Valuation Issues – Comparables:

Normalization adjustments for private companies
Precedent transactions: control premium and discount for no control
Valuation Issues – Venture Capital Pricing Methods:

Scorecard method
VC method
First Chicago method

Day 3 & 4
Financial Modeling & LBO Model Build Simulation 

3-Statement Model Build (Tailored to Private Companies):

Analyze multi-year product data to calculate:
Revenue, COGS, and volume
Price, cost, and gross profit per unit
Revenue growth and gross margin
Perform a bridge analysis to identify key drivers of Gross Profit growth — breaking down the impact of volume, price, and margin changes
Use historic SG&A data to clean and structure for forecasting
Complete the income statement
Operating Model Build: Balance Sheet and Cash Flow Statement

Work with a detailed asset register and forecast depreciation schedule for future PP&E
Learn to build depreciation triangles, layer in expansion capex, and forecast asset growth
Benchmark and forecast Operating Working Capital using step functions on days metrics
Forecast other assets and liabilities
Develop the critical skill of constructing a full cash flow statement
Valuation Simulation of Private Company

Use a list of trading comparables to perform valuation, applying key adjustments and real-world private company considerations
When time allows, explore other valuation approaches:
Transaction multiples
Construct a DCF model
LBO Model Build

Complete an LBO model with features including:
An equity rollover
Two types of equity: ordinary and preference shares
Two tranches of debt plus a revolver
Full cash sweep to senior debt
Perform returns analysis for:
Financial sponsor
Management
Structure the transaction:
Split between ordinary and preference shares
Type and amount of debt used
Management incentive packages

Day 5
Private Company M&A Modeling 

Foundations of Private Deal Modeling:

Navigate the unique challenges of modeling private deals
Understand the advantages of a full-blown merger model
Prepare and standardize stand-alone data for both acquirer and target
Build a flexible funding structure using a sources and uses of funds table
Model goodwill and goodwill amortization (assuming amortization is used by the acquirer)
Apply fair value adjustments to the target’s net assets
Refinance the target’s debt
Account for modeling fees (advisory and debt-issuance)
Include equity issuance fees
Consolidation & Analysis:

Consolidate the financial statements of the acquirer and target
Deal Analysis:

Pro forma ownership structure (when equity is used as currency)
Full credit analysis (when debt is used as currency)
Multi-year ROIC vs. WACC analysis
Detailed synergy forecast and synergy valuation
Contribution and side-by-side analysis
Analysis at various prices (AVP)
Calculate net income accretion/dilution effects of the deal
Sensitivity and scenario analysis
Identify the maximum offer price and a suitable financing mix