個案資料

In late 2021, Vahe Dombalagian, a managing director at Madison Dearborn Partners (MDP), contacted MoneyGram International Inc. (MoneyGram) chief executive officer Alex Holmes to discuss the middle-market private equity (PE) firm’s potential interest in a transaction with MoneyGram. MoneyGram was a global leader in the cross-border peer-to-peer (P2P) payment market, working to transition to the fast-growing digital payment market amid the emergence of low-cost financial technology competitors.<br><br>The case provides a discussion about deal evaluation metrics used by leveraged buyout (LBO) PE firms and provides necessary information to construct an LBO model to calculate the internal rate of return (IRR) and multiple of invested capital (MOIC) to determine an appropriate offer.<br><br>MDP was granted access to internal MoneyGram information and met with firm representatives as it worked with its financial advisers to obtain a debt commitment letter. The banks agreed to fund a debt financing package, and MoneyGram notified bidders that definitive acquisition proposals needed to be received by January 24, 2022. The MDP deal team needed to work quickly to finalize their offer.

This case is 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. The case provides a description of a potential LBO target for a PE firm as well as background information regarding how PE firms are operated and the methods they use to evaluate deals. After working through the case assignment questions, which involve developing an LBO model, students will be able to do the following:<ul><li>Explain how PE firms operate, generate revenue, and evaluate deals.</li><li>Evaluate an LBO candidate based on key characteristics. </li><li>Develop an LBO capital structure. </li><li>Evaluate key lending and valuation multiples. </li><li>Construct a sources and uses table and an initial balance sheet for a deal. </li><li>Develop an LBO model to determine IRRs to equity investors in different scenarios. </li></ul>

• private equity
• leveraged buyout model
• mergers and acquisitions M&A
• valuation
• leveraged buyout
• IRR
• mergers and acquisitions M&A