This 1-day, in-house, training course explains the objectives and roles of the entrepreneurs, financiers and advisers involved and the manner in which a successful transaction can be structured and achieved. The financial instruments employed are examined in detail together with the overall structure of the deal.
Course Notes, Slides and Exercises
Participants will receive a booklet containing copies of 17 slides and 78 pages of very comprehensive notes. Each slide will cover a number of related topics and the accompanying notes will support the content of the course to be delivered by the trainer.
During the course of the day, participants will undertake one or two exercises (problems) in groups of two or three (depending on the size of the class) which will involve considering what advice should be given to a client in particular circumstances. Participants will discuss the exercise with each other and then with the trainer and will receive a written answer to the problem.
An MBO team wishes to purchase the company that employs them and have given you a copy of the balance sheet and a profit forecast for the next three years. They ask you to advise them what percentage of equity in the buyout vehicle they should seek to negotiate with a private equity house when raising funds to finance the proposed deal.
Following your advice, the MBO team has agreed the funding requirement in principle with a private equity house and also the initial equity split between the managers and the investors. The final split of profits, however, will be subject to a ratchet, dependent upon the IRR required by the private equity house. The MBO team asks you how best to negotiate the ratchet.