Dates                                                                                                                
 
4-5 October 2010
22-23 March 2011
21-22 June 2011
25-26 October 2011                   
  
 Course Overview

This is a highly practical two-day programme designed to provide participants with an in-depth view of buy-outs. Participants will develop a thorough understanding of the commercial, technical, legal and financial issues, a detailed understanding of the buy-out process and a practical approach to assessing, implementing, structuring and financing the deal.

The course is highly intensive and is suitable for practitioners who have some experience and are involved in, or servicing, the private equity industry (e.g. transaction services, corporate financiers and lawyers) as well as lenders of senior, junior and other forms of finance and entrepreneurs considering buy-outs.

The course will also discuss recent developments in the LBO space including the feverish activity in the Bond markets and the innovations that have occurred there (Expro, UPC) as well as the ramifications of the IMO carwash deal for junior lenders.

Case studies will be used during the programme to reinforce and develop topics covered during the sessions.

Participants will be given an LBO model to assess debt structure so should bring both a laptop and calculator to the course.

Course Content

Introduction, Structuring issues & parameters
The traditional value creation model
    • Profit expansion
    • Debt retirement
    • Multiple arbitrage
New value creation model (deconstruction of the CAPM)
    • Optimise the capital structure
    • Evolution of new debt A-lite, bullet structures
    • New instruments (2nd Lien)
    • Other aspects
Structuring issues
    • Taking Security, Financial Assistance (new regime)
    • Tax issues
    • Control
Structuring parameters - creating an appropriate financial structure
    • Percentage senior, junior and equity in debt capital structure
    • Ebitda multiples
    • Target returns for PE & Mezz Funds

Financing Instruments: Key Terms, Conditions and Trends
Spectrum of financing instruments in LBOs
Senior loans and First Lien Notes
    • Capex aspects
    • RCFs - avoiding typical pitfalls
    • Cash sweeps - typical, terms structure & issues
Second lien - summary
Mezzanine and junior mezzanine
    • Rationale of warranted vs. warrant-less
    • Key issues for the warrant-holder
    • Key issues in warrant-less deals
High Yield Notes (FRNs and Fixed)
    • Current trends and developments in the Bond markets
    • Summary of key terms, pricing
    • Call protection in FRNs vs Fixed
PIK loans and notes - summary of key terms
Equity financing - typical structures and coupons
    • Structure - Loans, Prefs or DDBs
    • Typical returns
The Lender’s Perspective
Lender’s approach to credit decision
    • measuring debt capacity
    • security over assets
    • exit routes
Overview of loan documentation and impact on deal/restructuring
    • Loan as a radar system
    • Typical structure
    • Key parties (Obligors, Borrowers and Guarantors)
Inter-creditor agreement - overview of key issues (payment waterfall)
Key financial ratios / covenants
    • Limitations / interaction of the ADSCR, Tot. Debt/Ebitda, Interest cover
    • Selecting the appropriate ratio for the deal
The four deal scenarios and the role of due diligence

Sponsor’s Perspective
Structuring the equity
Ratchets
    • Rationale, structure
    • Pros and cons of positive vs. negative, stepped vs. linear
Structure of the PE market - the main categories and impact on the deal metrics
Structure and key terms for PE Funds (and impact of the deal)
    • Investment period (how long)
    • Preferred return (rate, calculation)
    • Carry (European vs US approach)
The 5 critical issues to Sponsors
    • The business model
    • Management - what PEs approach
    • Approach to generating value/returns
    • Exits - hard vs. soft
    • Key issues in the current market

Management issues
Multifaceted role and duties of management
    • Issues vis-à-vis role as Director, Employee, Shareholder, Warrantor
Critical issues in the Investment agreement
    • Good vs. Bad leaver
    • Management warranties
    • Equity - valuation issues pre exit
    • Transfer issues - drag, tag-along rights
Critical issues in the Service agreement
    • Restraints
Termination
 

IN ADDITION TO THE PUBLIC DATES ABOVE, THIS COURSE CAN ALSO BE TAILORED TO YOUR REQUIREMENTS AND DELIVERED IN-HOUSE FOR YOU.

PLEASE CIRCULATE THIS PDF AMONG YOUR COLLEAGUES!


IF YOU HAVE ANY QUESTIONS ABOUT THIS SEMINAR PLEASE WRITE TO US AT post@redcliffetraining.co.uk