Leveraged Buyouts: A Practical Guide to Investment Banking and Private Equity (Wiley Finance)

A comprehensive look at the world of leveraged buyoutsThe private equity industry has grown dramatically over the past twenty years. Such investing requires a strong technical know-how in order to turn private investments into successful enterprises. That is why Paul Pignataro has created Leveraged Buyouts + Website: A Practical Guide to Investment Banking and Private Equity.Engaging and informative, this book skillfully shows how to identify a private company, takes you through the analysis behind bringing such an investment to profitability--and further create high returns for the private equity funds. It includes an informative leveraged buyout overview, touching on everything from LBO modeling, accounting, and value creation theory to leveraged buyout concepts and mechanics.Step-by-step financial modeling - taught using downloadable Wall Street models, you will construct the model step by step as you page through the book.Model built complete with Assumptions, Returns to Investors, Debt Covenants, Income Statement, Cash Flow Statement, Balance Sheet, Balance Sheet Adjustments, Depreciation Schedule, Working Capital Schedule, Debt Schedule.Illustrative concepts on leveraged buyout mechanics aid in conceptual understanding.Hot keys and explicit Excel instructions aid even the novice excel modeler.Concepts are reiterated and honed, perfect for a novice yet detailed enough for a professional.Understanding of various sources of funds (bank debt, high-yield debt, mezzanine, PIK, and equity), uses of funds, and assumption drivers are honed.Model built direct from Heinz public filings, searching through notes, performing research, and illustrating techniques to formulate projections. Includes in-depth coverage of leveraged buyout techniques commonly used by Wall Street professionals including:Paid-in kind securities (PIK)Preferred dividends (with payout or deferred switch)Debt covenantsCapitalization and amortization of debt feesReturns to investorsStep-by-step we will come up with the expected return (IRR) of the Heinz investment to 3G and Berkshire Hathaway Chapter end questions, practice models, additional case studies and common interview questions (found in the companion website) help solidify the techniques honed in the book; ideal for universities or business students looking to break into the investment banking or private equity field.If you're looking for the best way to hone your skills in this field, look no further than this book. pt. One Leveraged Buyout Overview -- ch. 1 Leveraged Buyout Theory -- Cash Availability, Interest, and Debt Pay-Down -- Operation Improvements -- Multiple Expansion -- What Makes Good Leveraged Buyout? -- Exit Opportunities -- Is Heinz a Leveraged Buyout? -- ch. 2 What Is Value? -- Book Value -- Market Value -- Enterprise Value -- Multiples -- Three Core Methods of Valuation -- ch. 3 Leveraged Buyout Analysis -- Purchase Price -- Sources and Uses of Funds -- IRR Analysis -- pt. Two Leveraged Buyout Full-Scale Model -- ch. 4 Assumptions -- Purchase Price -- Sources of Funds -- Uses of Funds -- ch. 5 The Income statement -- Revenue -- Cost of Goods Sold -- Operating Expenses -- Other Income -- Depreciation and Amortization -- Interest -- Taxes -- Nonrecurring and Extraordinary Items -- Distributions -- Shares -- Heinz Income Statement -- Last Twelve Months (LTM) -- Income Statement -- Projections -- ch. 6 The Cash Flow statement. Cash Flow from Operating Activities -- Cash Flow from Investing Activities -- Cash Flow from Financing Activities -- Financial Statement Flows Example -- Heinz Cash Flow Statement -- Heinz Last Twelve Months (LTM) Cash Flow -- Cash Flow Statement Projections -- ch. 7 The Balance Sheet -- Assets -- Liabilities -- Heinz Balance Sheet -- ch. 8 Balance Sheet Adjustments -- Goodwill -- Heinz Balance Sheet Adjustments -- ch. 9 Depreciation Schedule -- Straight-Line Depreciation -- Accelerated Depreciation -- Deferred Taxes -- Projecting Depreciation -- Projecting Amortization -- Projecting Deferred Taxes -- ch. 10 Working Capital -- Asset -- Liability -- Operating Working Capital -- Heinz's Operating Working Capital -- Projecting Operating Working Capital -- Operating Working Capital and the Cash Flow Statement -- ch. 11 Balance Sheet Projections -- Cash Flow Drives Balance Sheet versus Balance Sheet Drives Cash Flow -- Balancing an Unbalanced Balance Sheet. Ch. 12 Debt Schedule and Circular References -- Debt Schedule Structure -- Modeling the Debt Schedule -- Circular References -- Automatic Debt Pay-Downs -- Basic Switches -- Finalizing the Model -- ch. 13 Leveraged Buyout Returns -- Exit Value -- Returns to 3G Capital -- Multiple Expansion -- Debt Pay-Down -- Conclusion -- pt. Three Advanced Leveraged Buyout Techniques -- ch. 14 Accelerated Depreciation -- Macrs -- Accelerated versus Straight-Line Depreciation -- ch. 15 Preferred Securities, Dividends, and Returns to Berkshire Hathaway -- Preferred Securities -- Preferred Dividends -- Returns to Berkshire Hathaway -- ch. 16 Debt Covenant Ratios, and Debt Fee Amortization -- Coverage Ratios -- Leverage Ratios -- Debt Fee Capitalization and Amortization -- ch. 17 Pald-in-Kind Securities -- Appendixes -- Appendix 1 Model Quick Steps -- Appendix 2 Financial Statement Flows -- Income Statement to Cash Flow -- Cash Flow to Balance Sheet -- Appendix 3 Excel Hot Keys. pt. One Leveraged Buyout Overview -- ch. 1 Leveraged Buyout Theory -- Cash Availability, Interest, and Debt Pay-Down -- Operation Improvements -- Multiple Expansion -- What Makes Good Leveraged Buyout? -- Exit Opportunities -- Is Heinz a Leveraged Buyout? -- ch. 2 What Is Value? -- Book Value -- Market Value -- Enterprise Value -- Multiples -- Three Core Methods of Valuation -- ch. 3 Leveraged Buyout Analysis -- Purchase Price -- Sources and Uses of Funds -- IRR Analysis -- pt. Two Leveraged Buyout Full-Scale Model -- ch. 4 Assumptions -- Purchase Price -- Sources of Funds -- Uses of Funds -- ch. 5 The Income statement -- Revenue -- Cost of Goods Sold -- Operating Expenses -- Other Income -- Depreciation and Amortization -- Interest -- Taxes -- Nonrecurring and Extraordinary Items -- Distributions -- Shares -- Heinz Income Statement -- Last Twelve Months (LTM) -- Income Statement -- Projections -- ch. 6 The Cash Flow statement.;"Shows how to identify a private company, takes you through the analysis behind bringing such an investment to profitability---and further create high returns for the private equity funds. It includes an informative leveraged buyout overview, touching on everything from LBO modeling, accounting, and value creation theory to leveraged buyout concepts and mechanics."--Publisher description.

A comprehensive look at the world of leveraged buyouts

The private equity industry has grown dramatically over the past twenty years. Such investing requires a strong technical know-how in order to turn private investments into successful enterprises. That is why Paul Pignataro has created Leveraged Buyouts + Website: A Practical Guide to Investment Banking and Private Equity.

Engaging and informative, this book skillfully shows how to identify a private company, takes you through the analysis behind bringing such an investment to profitability—and further create high returns for the private equity funds. It includes an informative leveraged buyout overview, touching on everything from LBO modeling, accounting, and value creation theory to leveraged buyout concepts and mechanics.

• Provides an in-depth analysis of how to identify a private company, bring such an investment to profitability, and create high returns for the private equity funds
• Includes an informative LBO model and case study as well as private company valuation
• Written by Paul Pignataro, founder and CEO of the New York School of Finance

If you're looking for the best way to hone your skills in this field, look no further than this book.

A comprehensive look at the world of leveraged buyouts The private equity industry has grown dramatically over the past twenty years. Such investing requires a strong technical know-how in order to turn private investments into successful enterprises. That is why Paul Pignataro has created Leveraged Buyouts + Website: A Practical Guide to Investment Banking and Private Equity. Engaging and informative, this book skillfully shows how to identify a private company, takes you through the analysis behind bringing such an investment to profitability—and further create high returns for the private equity funds. It includes an informative leveraged buyout overview, touching on everything from LBO modeling, accounting, and value creation theory to leveraged buyout concepts and mechanics. Provides an in-depth analysis of how to identify a private company, bring such an investment to profitability, and create high returns for the private equity funds Includes an informative LBO model and case study as well as private company valuation Written by Paul Pignataro, founder and CEO of the New York School of Finance If you're looking for the best way to hone your skills in this field, look no further than this book. The private equity industry has grown over the past 20 years. There are currently 1,478 private equity funds in the U.S. alone focused on private equity investing. Such investing requires a strong technical know-how in order to turn private investments into successful enterprises. In this book, Pignataro will identify a private company and step through the analysis behind how to bring such an investment to profitability, and to further create high returns for the private equity funds. The book will include: a leveraged buyouts overview including LBO modeling, accounting, and value creation theory; leveraged buyout concepts; leveraged buyout mechanics; an LBO model and case study; and private company valuation.