- Course background – private equity
- Where do private equity firms get their money from?
- Investment time frames and hurdles
- How are investors rewarded?
- How is success measured?
- De-mystifying jargon
Exercise – the power of leverage. Course delegates look at how private equity firms measure returns and consider the exact impact when leverage increases just slightly.
- Structuring a private equity buy out
- Senior debt
- Mezzanine finance
- Institutional equity
- Vendor notes
- Management equity
Exercise – sources and uses. Course delegates build up a deal structure (sources and uses) for a real deal.
- Pricing a private equity buy out
- Valuation of target company
- Debt considerations
- Use of P/E ratios
- Private equity’s IRR
Exercise – valuation case study. Course delegates look at a case study. How much might management be able to pay for this business?
- Achieving a successful private equity buy-out
- Determining debt capacity
- Negotiating equity stakes – management’s “Envy Ratio”
- Key criteria for success
- Due diligence considerations
Exercise – structuring equity. Course delegates look more closely at their case study. What equity stake might it seem reasonable for management to demand?
- Legal considerations
- Key documents
- Acquisition of the target
- Key protections for private equity
- What if the business struggles?
- How is the decision made to exit?
- What if a key manager leaves?
- When is a minority stake not a minority stake?
- Debt facilities
- Achieving exit
- Trade sale vs. flotation
- Secondary buy-outs vs. recapitalisation
Case study – exits. Course delegates look at a real private equity deal. What are the exit options for this business? What would they recommend if they were the private equity board member? In real-life, what actually happened?
- Course conclusion
- How private equity buy outs work
- How deals are structured
- Risks and rewards to different parties
- What investors are looking for and how they can best get it
Law CPD courses from training company FTA Ltd
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