Private Equity & Management Buy-Outs This course is presented in London on: 25 January 2018, 18 May 2018, 25 October 2018

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1 Private Equity & Management Buy-Outs This course is presented in London on: 25 January 2018, 18 May 2018, 25 October 2018 The Banking and Corporate Finance Training Specialist

2 Course Objectives Participants will: Be introduced to the growth of private equity and leveraged buyouts Get an overview of the principles of leveraged finance Have explained to them the use of debt to drive equity value and also how to structure the transaction, as well as the use of non-bank finance Be taught about how to identify and close a good private equity transaction Have an Course overview Overview on the ideal company characteristics of an MBO candidate and how to avoid conflicts of interest Background of the trainer The trainer has over 40 years of City experience, encompassing banking, investment banking, M&A, and corporate finance at Citicorp, early stage investment, and corporate advisory work. He is a director of several companies and chairman of a fast-growing software company quoted on AIM. Besides having been a visiting lecturer at the City of London (now Cass) Business School, he has 20 years experience of delivering in-house training to leading banks and investment banks in the UK, Europe, Africa, Asia and the USA, and public courses in UK, Europe and Asia covering M&A, company valuation, investment banking, corporate finance and credit analysis. Course Content The Growth of Private Equity and Leveraged Buyouts Academic rationale for the use of leverage Modigliani/Miller theory Michael Milken s research Growth of shareholder activism Reviving under performers Changes in company law The development of the European high yield bond and securitisation markets The Principles of Leveraged Finance The use of debt to drive equity values Cash flow management Reducing debt to drive equity value Operational improvements Building need to have Incentivisation of management Getting rich together Cash-capture clauses Exercise: Good or Bad LBO? Discussion of recent transactions to see which ones the attendees would do, and what lessons can be learned about elements of success or failure

3 Structuring the transaction Target IRR Assessing the return appropriate to the risk Assessing debt capacity Forecasting future cash generation Senior / mezzanine debt mix Judging asset values Forecasting exit values Consideration of non-bank finance High-yield bonds Terms and size of issue Second lien debt Too much debt? PIK finance Saint or sinner? Vendor loan notes Making the deal look good Case Study: Based on information provided attendees are tasked with structuring the finance for an MBO. Answers are discussed to identify the critical elements in the financing Legal elements Warranties and indemnities Investor protection New Memo & Arts Incorporating P.E. control elements Tag along and drag along Control of the exit Veto rights for private equity Control of management Management Jensen and Meckling agency theory Why buyouts work The envy ratio Management incentivisation Agreeing the ratchet Carrot and stick Good leaver / bad leaver provisions Covering under performance Exercise: Agreeing the terms of the envy ratio Identifying and Closing a Good Transaction Ideal company characteristics The three golden rules MBO / MBI Assessing management strength Meeting vendors expectations

4 Structuring the deal Avoiding conflicts of interest Recognising the risks of multi-layered financing Due diligence Investigation and verification Tie-in with contract terms Structuring the debt appropriate to the business Discussion: How to finance the acquisition of Manchester United. The Man U accounts are reviewed with the object of deciding how to finance its acquisition. Answers are compared to the actual result. Exit Control by P.E. house IPO Second round financing Trade sale The living dead Course Summary The sale of companies to management teams backed by Private Equity investors, using a leveraged financing of the acquisition, has become an increasingly common feature of the corporate scene. Whilst appearing simple to arrange, there are complex elements to a successful transaction. This course covers the principles and practicalities involved in arranging and negotiating a management buyout. In addition to the legal issues to be addressed, the use of bank debt and other financial instruments is examined in the context of developing a workable structure for the deal. What Redcliffe s clients are saying about the course; Good overview of structure of deal, made very understanding, much clearer Great case studies & anecdotes Brilliant trainer, very knowledgeable and practical points shared Relating the theory to real life examples. Practical and real examples. Very knowledgeable trainer, a lot of real life anecdote to bring theory to life. Interesting and engaging and came away with some new insights and learnings.

5 09:30-17:00 London Standard Price: 625+ VAT Membership Price: VAT Delivering this course in-house for you to a number of participants could be very cost effective.