LEVERAGED BUY-OUT (LBO)
WHAT IS A LEVERAGED BUYOUT?
A leveraged buyout refers to a type of acquisition whereby the acquiring company uses a significant amount of borrowed money to complete the transaction. Usually, the assets and cash flows of the target company are used as collateral for the loans. Often, after a certain period, when the debt is fully or partially repaid, the acquired company is sold at a profit.
This type of transaction is very popular in the field of M&A. It allows for large returns on investment due to the large amount of relatively cheap debt, used to finance the purchase. Usually, private equity firms as well as investment banks have special funds designated for LBO activity.
SKILLS REQUIRED TO WORK ON LBOs
Like any M&A activity, LBO transactions involve a lot of hard work and the hours can be very long. Even as a junior analyst, you will be communicating with CEOs and management teams, so people skills are a must. You will be doing a lot of due diligence, so you need to have strong research skills. Most importantly, you need to have the technical skills in corporate valuation and financial modeling to perform financial analysis on potential LBO opportunities.
HOW CAN THE IFI TRAINING COURSE HELP ME MODEL LEVERAGED BUY-OUTS?
The IFI training course is designed to equip you with all the technical skills and knowledge you need to work on LBOs. You will cover financial statement analysis, corporate valuation and financial modeling, including LBO modeling. Classes are led by experienced investment bankers who are there to provide you with current insights into the LBO industry and advise you on soft skills, specific to this area of finance.