M&A and LBO Modeling

Day 1

• Introduction to the real life M&A transaction
• Setting up a M&A Model – Calculating Sources &i; Uses of funds
• Preparing Pro forma Financial Statements
• Introduction to M&A accounting
• Goodwill
• Accounting for sources and uses of funds
• Forecasting acquirer & targets key financials
• Consolidating financial statements

• M&A Model output:
• EPS Accretion-Dilution Analysis
• Contribution Analysis
• Post transaction P/E requirement for breakeven

• Sensitivity Analysis using data tables

• Introducing the case study company
• Model design and structure for the case study company
• Know the key model outputs and their drivers
• Understand the requisite inputs
• Developing cell styles for model transparency and review

Day 2

• Introduction to LBO modeling

• Understanding characteristics of a good LBO candidate

• Forecasting the operating cash flows of the LBO target

• Target’s enterprise value and uses of funds

• Various sources of funds
• Senior Debt (Term Loan A, B, etc.)
• High yield , Mezzanine, PIK and Shareholder loan
• Revolving line of credit

• Preparing flexible debt and interest repayment schedules for different sources of funding

• Incorporating cash sweep in debt schedules and avoiding circularity

• Calculating exit IRR and MOIC for the GP and analyzing the sources of value creation

• Scenario and Sensitivity Analysis for analyzing LBO