Private Equity: Leveraged Buyouts (LBOs)

What you’ll learn
Private Equity Investment Process
Leveraged Buyout (LBO) Transactions in Private Equity, Illustrated with a Real-Life Case
LBO´s Value Drivers: Growth in EBITDA, Multiple Arbitrage, and Leverage
Adjusted Present Value (APV) Method
Requirements
This is an intermediate level finance course. Students should be able to calculate Free Cash Flows and Net Present Value
Description
*** You will have full access to the spreadsheets used in the videos ***

Welcome to the Private Equity course, where you will learn to evaluate leveraged buyout transactions. My name is Carlos Martínez, I have a Ph.D. in Management from the University of St. Gallen. During my doctoral studies, I delved into access to entrepreneurial financing in contexts with institutional voids, research that I presented at some of the most prestigious academic conferences and doctoral colloquiums held at the University of Tel-Aviv (Israel), Politecnico di Milano ( Italy), University of Halmstad (Sweden) and MIT (USA), and which was also partially published as a chapter of the book “New Frontiers in Entrepreneurial Finance Research,” co-edited by established Professors in the Entrepreneurial Finance literature.

Upon completion of this course, you will learn about the investment process used by general partners of private equity firms. Furthermore, you will be able to evaluate leveraged buyout transactions using the adjusted present value method. These skills will be useful if you are a university student or young professional interested in pursuing a career in investment banking, corporate finance, or consulting.

This is a very comprehensive course, including presentations, tutorials, and assessments. The course has a practical approach and uses the teaching case method, so you will have to evaluate a private equity transaction from two perspectives: on the one hand, from that of a Corporation evaluating selling one of its division and on the other hand, from that of a private equity firm evaluating acquiring such division.

We will start the course with a theoretical introduction to private equity and its investment process. Then, we will present the teaching case based on the leveraged buyout of DuPont´s Coatings Division and will first make a qualitative analysis of the investment, illustrating the different value drivers in this type of transaction, namely the growth in EBITDA, multiple arbitrage, and financial leverage. After that, we will elaborate an Excel model with different valuation scenarios, to which you will have full access.

Leveraged Buyouts in Private Equity is a topic generally covered in the corporate finance course at the undergraduate level and the finance for entrepreneurs course at the graduate level. The ideal participants of this course are university students and young professionals related to business, finance, accounting, law, and even from other academic areas interested in pursuing a career in investment banking, corporate finance, and financial consulting. This is an intermediate level course, requiring a basic understanding of free cash flows and the net present value method.

Feel free to take a look at the course description and I am looking forward to seeing you soon!

Who this course is for:
University students and young professionals interested in pursuing a career in corporate finance, private equity and financial consulting