Private Equity & Management Buy-Outs

Transcription

1 Private Equity & Management Buy-Outs Be introduced to the reasons for the growth of private equity and management buy-outs This course is presented in London on: 17 January 2019, 11 July 2019, 14 November 2019 If you have 4 or more participants, it may be cost effective to have this course presented in-house either on your premises or via live webinar. Trusted By: The Banking and Corporate Finance Training Specialist

2 What Makes This Course Different Both as an investment banker and an own-account investor, the trainer has practical experience of private equity investment; His 40 year City experience includes advising on leveraged transactions in the UK and overseas; He has run both public and in-house courses on the subject for over 20 years; Central to the course is the use of practical exercises and case studies. Course Overview Course Objectives Be introduced to the reasons for 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 Be taught how to identify and close a good private equity transaction Have an overview on the ideal company characteristics of an MBO candidate and how to avoid conflicts of interest Course Content The Growth of Private Equity and Leveraged Buyouts The 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 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

3 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 clauses 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 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

4 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 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 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.

5 09:30-17:00 London Standard Price: 625+ VAT Membership Price: VAT In-House Training Delivering this course in-house for 5 or more participants could be very cost effective. The venue and timing can be agreed to suit the client, as well as the selection of the trainer and the precise contents of the seminar. Tailored Learning All of our training courses can be tailored to suit your company s exact training needs. We will work closely with you to help develop a training programme with content that is unique for your organisation. Please us on enquiries@redcliffetraining.co.uk for more information E-Learning This course can also be presented as a bespoke e-learning programme created by you to fit your exact requirements.