個案資料
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Blackstone Group: Dry Powder in an LBO Drought (A)
內容大綱
In late 2016, it had been three years since Blackstone Group Inc. (Blackstone) had completed its last public-to-private leveraged buyout (LBO), and it had US$45 billion of capital available for investment, called “dry powder.” Blackstone’s head of private equity (PE) blamed this public LBO drought on “historically high multiples of cash flow.” Blackstone submitted a preliminary offer to acquire a firm they had previously acquired 11 years earlier and exited in 2009. The banks committed to provide a senior credit facility, consisting of a seven-year Term Loan B, a revolver, and junk bonds; management provided forecasts of revenue and earnings before interest, tax, depreciation, and amortization. The four-week exclusivity period was set to expire, and previous bidders in a recent takeover battle could re-emerge. Blackstone had to determine a final offer based on their LBO model.
學習目標
These cases are suitable for both undergraduate- and graduate-level courses on mergers and acquisitions, PE, valuation, corporate finance, or financial modelling to provide an application of financial modelling in general and LBO modelling specifically. These cases provide a discussion of a potential target for an LBO-focused PE firm as well as background information on PE firms. After working through the cases and assignment questions, students will be able to understand the following:<ul><li>How PE firms operate, generate revenue, and evaluate deals.</li><li>The characteristics of a good LBO candidate.</li><li>How to develop an LBO capital structure and measure the key lending and valuation multiples.</li><li>How to construct a sources and uses table and an initial balance sheet for a deal.</li><li>How to develop an LBO model to determine initial rates of return to equity investors in different exit scenarios.</li></ul>