Transaction Comparables and LBO Analysis Fundamentals

Description

AMT Training has a new home!

In 2021, AMT Training joined Training The Street

The new global standard in financial modeling and valuation training
We have expanded our product offering by combining our content libraries with Training The Street. You can find your training solutions for corporate, Public Courses, and self-study all in one place.

Who should attend the course?

• New hires who have joined the firm late and missed the in-house program
• Individuals looking to fill a knowledge gap
• Experienced bankers looking to refresh their technical skills
• Teams employed in financial strategy roles from non-banking corporations
• Graduates preparing to interview for a role in the finance sector
• Students at business school and looking for a career in finance

What you will learn

Transaction Comparables

Participants are introduced to preparing a transaction multiples matrix using LTM earnings. The rationale and components of control premium and its impact on valuation are discussed. A comparable transaction analysis is performed on the case industry.

Learning outcomes:

• Difference between trading multiples and multiples from precedent transactions
• Selection of transactions and information gathering
• Change of control issues
• Share capital and equity linked instruments
• Pensions
• Poison pills
• Control premium and synergies
• Bottom up calculation of enterprise and equity value multiples
• Practical issues with transaction comparables
• Analysis and summary output

LBO Analysis Fundamentals

Participants are introduced to the basic concepts underlying leveraged buyouts. The session starts by establishing why private equity firms can create value through leveraged buyouts and how the levered valuation fits into the valuation roadmap. Using a simple free cash flow forecast, participants establish how much a financial buyer could pay for the target company. Participants then build a simple LBO model.

Learning outcomes:

• What an LBO is and how it can create value
• LBO valuation as an alternative valuation methodology
• Characteristics of suitable LBO candidates
• Estimating cash flows available to capital holders
• Estimating debt capacity
• Simplified debt/equity split for entry capital structure
• Sources and uses of funds
• Debt structure
• Estimating the exit value
• Calculating the IRR
• Sensitizing the model