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ID:7320825
大小:486.62 KB
页数:34页
时间:2018-02-11
《investment banking valuation leveraged buyouts》由会员上传分享,免费在线阅读,更多相关内容在工程资料-天天文库。
1、P1:ABC/ABCP2:c/dQC:e/fT1:gc04JWBT063-RosenbaumMarch26,200921:47PrinterName:HamiltonCHAPTER4LeveragedBuyoutsleveragedbuyout(LBO)istheacquisitionofacompany,division,business,orAcollectionofassets(“target”)usingdebttofinancealargeportionofthepur-chaseprice.Theremainingportionofthepurchasepriceisfund
2、edwithanequitycontributionbyafinancialsponsor(“sponsor”).LBOsareusedbysponsorstoacquireabroadrangeofbusinesses,includingbothpublicandprivatecompanies,aswellastheirdivisionsandsubsidiaries.Thesponsor’sultimategoalistorealizeanacceptablereturnonitsequityinvestmentuponexit,typicallythroughasaleorIPO
3、ofthetarget.Sponsorshavehistoricallysoughta20%+annualizedreturnandaninvestmentexitwithinfiveyears.1InatraditionalLBO,debthastypicallycomprised60%to70%ofthefinancingstructure,withequitycomprisingtheremaining30%to40%(seeExhibit4.12).Thedisproportionatelyhighlevelofdebtincurredbythetargetissupportedb
4、yitsprojectedfreecashflow2andassetbase,whichenablesthesponsortocontributeasmallequityinvestmentrelativetothepurchaseprice.Theabilitytoleveragetherelativelysmallequityinvestmentisimportantforsponsorstoachieveacceptablereturns.Theuseofleverageprovidestheadditionalbenefitoftaxsavingsrealizedduetothet
5、axdeductibilityofinterestexpense.Companieswithstableandpredictablecashflow,aswellassubstantialassets,generallyrepresentattractiveLBOcandidatesduetotheirabilitytosup-portlargerquantitiesofdebt.Strongcashflowisneededtoserviceperiodicinterestpaymentsandreducedebtoverthelifeoftheinvestment.Inaddition,
6、astrongassetbaseincreasestheamountofbankdebtavailabletotheborrower(theleastexpensivesourceofdebtfinancing)byprovidinggreatercomforttolendersregard-ingthelikelihoodofprincipalrecoveryintheeventofabankruptcy.Whenthecreditmarketsareparticularlyrobust,however,creditprovidersareincreasingly1Dependingo
7、nthelong-termstructuraleffectsofthesubprimemortgagecrisisandensuingcreditcrunch,includingtheabilitytoraisedebtathistoricallevels,theselong-establishedbenchmarksmayberevisited.2The“freecashflow”term(“leveredfreecashflow”or“cash
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