Private Equity Masterclass
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The Private Equity Deal Process
LBO Modeling
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Bonus Course: LBO Modeling in the Lower Middle Market
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PE Masterclass: Crushing the Paper LBO is Just the Beginning
LBO Modeling & the PE Deal Process
The Private Equity Masterclass teaches trainees how to construct comprehensive LBO models used to support real transactions and gives an insiders walkthrough of the nuances of the private equity deal process and the non-modeling day-to-day responsibilities of a Private Equity professional.
Led by PE Professionals
This course is NOT an academic exercise. It is taught by PE professionals who have been involved in some of the most high-profile private equity deals in the last 10 years.
Learn from the Private Equity's #1 Trainer
4 of the Top 5 Private Equity firms globally use Wall Street Prep to train their incoming PE Analysts and Associates. Attending this program gives you access to the same virtual training.
This job-focused training program is ideal for Private Equity associates, MBAs and investment bankers looking to break into PE.
Who is This Program For?
A Complete LBO and PE Training Program
The Private Equity Deal Process
LBO Modeling
Middle Market LBO Modeling
What's Included
LBO Modeling
Leveraged buyout (LBO) modeling is used widely by investment banks and private equity firms and is o ...
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Course TOC
LBO Modeling
Leveraged buyout (LBO) modeling is used widely by investment banks and private equity firms and is often part of a finance interview. In this course, you will learn how to build a real, complex LBO model from scratch. You will start by learning about basic LBO concepts, typical deal structures, and ...
Leveraged buyout (LBO) modeling is used widely by investment banks and private equity firms and is often part of a finance interview. In this course, you will learn how to build a real, complex LBO model from scratch. You will start by learning about basic LBO concepts, typical deal structures, and current industry dynamics. You will then begin the step-by-step modeling, covering the most common and challenging issues that emerge when modeling buyouts. The course concludes with a sensitivity and scenario analysis, as well as how to build output tables that are key to any professional-grade LBO analysis.
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Chapter 1: LBO Basics
1. LBO Modeling Course Welcome
1:21
2. Course Downloads
Files
3. LBO Modeling Course Roadmap
0:48
4. Introduction to LBOs
7:25
5. Working Through the Dell LBO on a Cocktail Napkin, Part 1
8:07
6. Working Through the Dell LBO on a Cocktail Napkin, Part 2
5:42
7. What makes a good LBO?
4:26
8. Current LBO Environment, Part 1
7:51
9. Current LBO Environment, Part 2
9:10
10. Current LBO Environment, Part 3
6:55
11. Tax savings in LBOs
3:37
12. Tax Reform Impact, Part 1
3:51
13. Tax Reform Impact, Part 2
4:45
14. LBO Capital Structure - Equity
4:02
15. LBO Capital Structure - Debt
7:04
16. Term Loans & the Revolver, Part 1
6:43
17. Term Loans & the Revolver, Part 2
7:16
18. Bonds
5:28
19. Covenants
4:25
20. Mezzanine Financing & Bridge Loans
3:39
21. Extended Dell LBO on a Cocktail Napkin, Part 1
2:46
22. Expanded Dell LBO on a Cocktail Napkin, Part 2
6:07
Chapter 2: The Structure of PE Firms & Investor Dynamics
23. Dry Powder
2:38
24. How PE Funds Work
7:12
25. GP vs. LP Dynamics
5:15
26. Tax Reform Impact on the Structure of PE, Part 1
5:11
27. Tax Reform Impact on the Structure of PE, Part 2
4:42
28. Whole-Fund vs. Deal-by-deal Distribution Model
2:34
29. Distribution Waterfall Exercise, Part 1
10:12
30. Distribution Waterfall Exercise, Part 2
3:41
Chapter 3: Modeling a Real LBO
31. Case Study Introduction: The Leveraged Buyout of BMC
5:25
32. General Inputs
5:53
33. Initial Valuation: Offer Price vs. Enterprise Value
10:00
34. Diluted Shares, Part 1
12:26
35. Diluted Shares, Part 2
5:21
36. Sources and Uses of Funds, Part 1
13:20
37. Sources and Uses of Funds, Part 2
9:52
38. Creating the Historical Income Statement
13:24
39. Forecasting the Income Statement, Part 1
7:04
40. Forecasting the Income Statement, Part 2
8:35
41. Forecasting the Income Statement, Part 3
3:27
42. Forecasting Accounts Receivable
6:22
43. Forecasting Other Working Capital Items
10:30
44. Preparing the PP&E Schedule
10:44
45. Preparing the Software Development Costs, Intangibles and Goodwill Schedules
9:59
46. Forecasting PP&E
7:49
47. Forecasting Software Development Costs
2:16
48. Forecasting Intangibles, Goodwill, Other Assets & Other Liabilities
5:58
49. The Cash Flow Statement
7:05
50. Cash
4:53
51. Interest Income and Circularity
5:27
52. Modeling the Revolver
8:55
53. Modeling Required Debt Amortization
6:57
54. Modeling Cash Sweeps
12:33
55. Modeling the Revolver Borrowing Base Compliance
5:12
56. Modeling PIK Debt & Preferreds
4:05
57. Capitalized Financing Fees
2:23
58. Modeling Interest Expenses
16:58
59. Completing the IS and CFS
2:29
Chapter 4: LBO Exit & Returns Analysis
60. Model Review and Introduction to Exit Analysis
5:16
61. Enterprise Value at Various Exit Multiples
7:57
62. Exit Equity to Sponsors & Management, Equity Kickers to Mezz
7:24
63. Returns to Senior Debt
8:24
64. Returns to Sub Debt
5:39
65. Modeling IRRs and Cash-on-Cash Returns
3:43
66. Creating an LBO Summary Table
6:26
Chapter 5: Sensitivity Analysis
67. Modeling Hurdle Rate Sensitivity
11:16
68. IRR Sensitivity to Leverage and Valuation
7:12
69. IRR Sensitivity to Mezz Debt Terms
11:43
70. Model Review
13:49
Chapter 6: Pro Forma Balance Sheet Adjustments
71. Setting up the Historical Balance Sheet
6:16
72. Adjusting the Balance Sheet to Reflect the LBO
11:58
73. Modeling LBO Goodwill and a Recap Toggle
3:16
74. Pro Forma Balance Sheet (PFBS) Historicals
2:30
75. Forecasting PFBS Assets
4:28
76. Forecasting PFBS Liabilities & Equity
11:26
77. Post-2015 financing fee rules in LBO models
12:03
78. Goodbye
0:13
Appendix I: Dividend Recaps
79. Understanding BMC's Dividend Recap
4:52
80. Adjusting the Model for BMC's Dividend Recap and PIK Toggle Sub Debt
3:43
81. Alarm Over Dividend Recaps
3:35
Appendix II: Advanced Purchase Price Allocation Modeling
82. Modeling Asset Write Ups
7:50
83. Asset Sale (338)/Stock Sale Toggle and DTLs
7:36
84. Impact on the IS and CFS
8:47
85. Impact on the Balance Sheet
5:06
Appendix III: Attaching a DCF Analysis to an LBO Model
86. Adding a DCF Analysis to the LBO Model
10:08
Appendix IV: KKR LBO of BMC in 2018
87. What the KKR deal tells us about likely actual IRRs
13:57
Appendix V: Debt Deep Dive
88. Leveraged Finance: Debt Deep Dive
Reading
The Private Equity Deal Process
Led by former private equity professionals, this course takes a deep dive into the Private Equity de ...
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Course TOC
The Private Equity Deal Process
Led by former private equity professionals, this course takes a deep dive into the Private Equity deal process and the day-to-day responsibilities of a PE professional. Designed for incoming and prospective PE associates as well as investment bankers and lenders working with PE clients, this boot ca ...
Led by former private equity professionals, this course takes a deep dive into the Private Equity deal process and the day-to-day responsibilities of a PE professional. Designed for incoming and prospective PE associates as well as investment bankers and lenders working with PE clients, this boot camp is an insider's walkthrough of the key phases of the PE deal process. We bring you through the major PE deal checkpoints (Pre-Deal,First Round Bid/IOI,Diligence Deep Dive/LOI, Post-LOI, Closing) and describe how junior professionals can add value to the deal team.
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PE Deal Process Introduction
1. PE Deal Process Course Introduction
0:46
2. Course Downloads
Files
3. Meet Your Instructors
1:24
4. PE Deal Process Course Goals
1:12
5. PE Structure
2:56
6. How A Deal Starts
1:13
7. Auction vs Negotiation
2:26
8. The 3 PE Workstreams
3:49
9. PE Analyst vs Associate
3:40
10. Introducing The JoeCo Case Study
2:10
11. Introducing The JoeCo Deal Stakeholders
0:37
12. The JoeCo Gantt Chart
0:26
13. PE Deal Process Jargon
3:11
14. PE Deal Process Preview
7:06
15. PE Deal Process Introduction Review
Quiz
Teaser and NDA
16. Pre-Deal Process Teaser Intro
2:49
17. Teaser Summary
1:38
18. Teaser Exercise
1:27
19. Teaser Exercise Review
4:18
20. Q&A: Can You Send Too Many Teasers?
1:43
21. Teaser Pro Tips and Wrap Up
1:10
22. Q&A: Is Modeling Done for Teasers?
0:23
23. Additional Sample Teaser
0:23
24. NDA Intro
3:09
25. NDA Summary
5:04
26. NDA Exercise
0:51
27. NDA Exercise Review
5:24
28. Q&A: Who is the Receiving Party in an NDA
0:35
29. Q&A: Do NDA Breaches Get Litigated
2:11
30. Q&A: How Many Buyers at NDA Stage
1:57
31. Q&A: Do PE firms Have a Call with IB After Receiving the Teaser?
0:45
32. Teaser & NDA Review
Quiz
The CIM and IC Memo
33. The CIM Introduction
5:40
34. The Associate Role vis a vis CIMS
1:12
35. CIM Summary
1:51
36. CIM Exercise
1:09
37. CIM Exercise Review
4:04
38. CIM Pro-Tips
0:41
39. IC Memo Intro
3:31
40. IC Memo Deep Dive
0:22
41. Q&A: Internal Ops vs Consultants
1:42
42. The CIM and IC Memo Review
Quiz
Mini-Model
43. IC Memo Mini-Model
1:23
44. Mini-Model Walkthrough
3:26
45. Inputs and Assumptions, I
3:37
46. Inputs and Assumptions, II
4:44
47. Sources & Uses Walkthrough
0:39
48. P&L and Working Capital Walkthrough
5:15
49. Cash Flow Statement
6:21
50. Revolver and Debt
6:25
51. Interest Schedule
4:12
52. Returns Analysis
2:54
53. Management Rollover
4:03
54. Mini-Model Review
Quiz
Initial Financing Indication
55. IC Memo Summary
0:51
56. Initial Financing Indications
5:14
57. IFI Roles
1:41
58. Q&A: Do Lenders Dispute Conservative Assumptions?
1:07
59. Q&A: Are All Lenders Using the Same Call Pool?
1:41
60. Q&A: Different Growth Projections
1:14
61. Q&A: Conservative Case Rationale
2:27
62. Q&A: Do Conservative Assumptions Result in a Lower Rate?
0:54
63. Q&A: How Many Lenders Should You Seek?
1:00
64. IFI Deep Dive
1:39
65. Indicative Terms Review
7:08
66. Q&A: Is a Cash Sweep Typical?
1:53
67. Q&A: Minimum Equity Contribution
1:30
68. Q&A: Why Do PE Firms Prepay Debt?
5:01
69. Q&A: What is Unitranche Debt?
2:20
70. Appendix: NDA and PA Typical Terms
0:52
71. Initial Financing Indication Review
Quiz
IOI • Due Diligence • Management Meeting
72. IOI Introduction
3:51
73. IOI Roles
3:32
74. The JoeCo IOI
8:17
75. Q&A: What are Earnouts?
1:15
76. Q&A: What is Management Rollover?
0:29
77. Summary: What We've Done So Far
1:06
78. Diligence
3:24
79. Third Party Advisors
4:05
80. The Data Room
3:55
81. Q&A: Pre-LOI Third Party Support
0:44
82. Q&A: Are Data Rooms Ever Intentionally Confusing?
1:24
83. Q&A: The Role of Consultants
2:44
84. Q&A: Why Not Engage Third Party Pre-LOI?
1:19
85. Management Meeting Presentation Intro
2:51
86. Management Meeting Roles
2:06
87. IOI, Due Diligence and Management Meeting Review
Quiz
Debt Commitment and LOI
88. Debt Commitment Letter Intro
5:28
89. Sample Debt Commitment Letter
1:48
90. Swingline
0:51
91. Other Terms - Collateral, Amortization, etc
3:25
92. Pre-LOI IC Memo Intro
3:39
93. LOI Intro
4:27
94. LOI Exercise
1:17
95. LOI Review 1
3:16
96. LOI Review 2
0:40
97. LOI Review 3
1:59
98. Q&A: How Does Exclusivity Work?
1:27
99. Q&A: Does the Buyer-Seller Relationship Turn Hostile?
0:46
100. Q&A: Unsolicited Bids in Exclusive Deals
0:53
101. Q&A: Break-up Fees
0:39
102. Q&A: Do Break-up Fees Apply to Both Buyer and Seller?
0:49
103. Q&A: Can the Seller Negotiate LOI Terms
1:18
104. Q&A: What Makes the JoeCo LOI Aggressive?
1:28
105. Q&A: Who Negotiates the LOI?
0:36
106. Post-LOI Work 1
0:50
107. Post-LOI Work 2
0:17
108. Q&A: What Percent of Post-LOI Deals Close?
0:20
109. Debt Commitment & LOI Review
Quiz
Working Capital Peg; SPA & APA
110. Working Capital Peg Intro
4:36
111. Purchase Agreement Intro
2:46
112. Purchase Price Negotiations Post LOI
1:38
113. Post-LOI Introduction
3:48
114. Working Capital Target
6:05
115. Locked Box Mechanism
1:47
116. Negative Working Capital
2:17
117. Working Capital Composition
2:27
118. SPA/APA
2:43
119. Q&A: Deal Insurance
1:15
120. Purchase Agreement Roles
1:36
121. SPA/APA Typical Terms
7:06
122. Final Credit Agreement
4:00
123. Final Credit Agreement Key Terms
4:38
124. Covenant Cushion Analysis
1:03
125. Defining EBITDA In The Credit Agreement
2:12
126. TSA
0:20
127. Post-Close
3:21
128. Funds Flow
4:34
129. Pe Deal Process Conslusion
0:20
130. Q&A: How Do Take-Privates Work
1:50
131. Q&A: How Do Credit Funds Make Investments
3:03
132. Working Capital PEG; SPA & APA Reveiw
Quiz
LBO Modeling in the Lower Middle Market
This LBO modeling-focused course focuses on a Middle Market transaction, where private equity profes ...
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Course TOC
LBO Modeling in the Lower Middle Market
This LBO modeling-focused course focuses on a Middle Market transaction, where private equity professionals often operate with little structure. First, you will listen in on a conference call with the Managing Partner of a hypothetical private equity firm and, through step-by-step videos, learn to b ...
This LBO modeling-focused course focuses on a Middle Market transaction, where private equity professionals often operate with little structure. First, you will listen in on a conference call with the Managing Partner of a hypothetical private equity firm and, through step-by-step videos, learn to build a monthly LBO model from scratch that answers the seemingly simple (yet loaded) question, “is this deal financeable, and what do the returns look like?” After the call, the Managing Partner will be unavailable for any follow-up questions, so this course walks you through how to think independently and come up with solutions when you’re on your own, just like you will be expected to on the job. The course concludes with print-friendly summaries and an email recommendation to the Managing Partner on whether or not to move forward with the deal.
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LBO in the Lower Middle Market Introduction
1. Intro & About Me
3:56
2. Course Downloads
Files
3. Course Overview
12:02
4. Private Equity Overview
5:52
5. MP Call Full
9:51
Raw Data
6. Raw Data Pt1
5:10
7. Raw Data Pt2
6:47
8. Raw Data Pt3
9:09
Statement of Cash Flows
9. Statement of Cash Flows Pt1
6:37
10. Statement of Cash Flows Pt2
7:35
EBITDA
11. EBITDA OVERVIEW
9:40
12. EBITDA As Defined
7:20
13. EBITDA Management Adjustments
6:04
14. EBITDA Diligence Adjustments Pt1
12:02
15. EBITDA Diligence Adjustments Pt2
3:48
16. EBITDA Diligence Adjustments Pt3
9:49
Income Statement Forecast
17. Income Statement Forecast Build
9:00
18. Income Statement Forecast Overview
4:04
19. Income Statement Forecast Revenue
3:40
20. Income Statement Forecast Gross Profit & COGS
3:31
21. 2015 Pro Forma Adjustments
9:06
22. 2016 Pro Forma Adjustments
4:58
23. SG&A Analysis
7:17
24. Variable Expense Build
3:28
25. Fixed Expense Build
10:15
26. New Hire Build
7:06
27. Tax Expense & Income Statement Zoom Out
4:59
Balance Sheet Forecast
28. Balance Sheet Build
9:22
29. NWC Layout
4:47
30. NWC DSO & AR
6:43
31. NWC DPO & DOH
5:12
32. NWC Prepaid & Accrued Expenses
4:47
33. NWC Ratio
3:32
34. NWC Inventory Turnover
2:18
35. NWC Cash Conversion Cycle
3:59
36. NWC Target
9:37
37. Depreciation & Capex Pt1
7:52
38. Depreciation & Capex Pt2
9:23
39. Depreciation & Capex Pt3
9:23
40. Quick Clean Up
3:45
41. Bonus Accrual Pt1
3:35
42. Bonus Accrual Update
1:49
43. Bonus Accrual Pt2
4:21
44. Bonus Accrual Pt3
5:53
45. Tax Accrual Pt1
5:14
46. Tax Accrual Pt2
10:09
47. Balance Sheet Follow-up Questions
5:30
Transaction Buildout
48. Transaction Overview
3:32
49. Purchase Price Build
10:26
50. Sources & Uses Layout
8:20
51. Debt Sources
5:34
52. Known Inputs & Fees
7:33
53. Finishing Sources & Uses
9:29
54. Pro Forma Equity
6:41
55. Blended Cash Interest
5:43
Pro Forma Balance Sheet
56. Pro Forma Balance Sheet Overview
3:16
57. Pro Forma Balance Sheet Layout
6:13
58. Multiples with Fees
2:41
59. Pro Forma Balance Sheet Sources
3:57
60. Pro Forma Balance Sheet Uses
8:10
Layering Transaction into Income Statement
61. NewCo IS Adjs
8:29
62. NewCo BS Adjs
6:41
63. NewCo SCF Adjs
8:43
64. NewCo IS Fill-Ins
8:10
Layering Transaction into Balance Sheet
65. NewCo BS Fill-Ins Retained Earnings
5:19
66. NewCo BS Fill-Ins Equity
3:38
67. NewCo BS Fill-Ins Debt
3:54
68. NewCo BS Fill-Ins CircFix on Cash
5:10
69. NewCo BS Fill-Ins Def Fees & Goodwill
2:45
70. NewCo BS Fill-Ins Cash & Cleanup
7:22
Quality Control
71. Check Build
4:33
Debt Schedule
72. Debt Schedule Layout
3:49
73. Cash Flow Sweep Layout
6:20
74. Cash Flow Sweep Build
11:15
75. Revolver Layout
5:53
76. Revolver Build Pt1
6:24
77. Revolver Build Pt2
3:13
78. Revolver Build Pt3
8:08
79. Revolver Build Pt4
4:38
80. Senior Build Pt1
3:20
81. Senior Build Pt2
5:46
82. Senior Build Pt3
4:05
83. Senior Build Pt4
2:53
84. Mezz Build Pt1
3:46
85. Mezz Build Pt2
4:37
86. Def Fin Fees
4:46
87. Debt Schedule Link Up
12:06
Circularity Breaker
88. Circularity Breaker
6:19
Regroup & Clean Up
89. Home Stretch Clean Up
9:08
Covenants
90. Covenant Layout
4:44
91. Current Ratio Covenant
8:17
92. FCCR Covenant Layout
4:47
93. FCCR Covenant Build Pt1
13:38
94. FCCR Covenant Build Pt2
5:48
95. Leverage Ratio Layout
4:02
96. Leverage Ratio Build
6:41
Equity Returns
97. Returns Overview
8:20
98. Global Waterfall Layout
9:01
99. Global Waterfall Debt Payoff
8:06
100. Global Waterfall Preferred Equity
7:35
101. Global Waterfall Common
2:27
102. LP Waterfall Layout
4:19
103. LP Waterfall Build
6:30
104. Equity Return Layout
5:12
105. LP Return Build
6:47
106. Seller Return Build
6:28
107. Sponsor Return Build
6:00
Summaries
108. Final Clean Up
8:39
109. Monthly Summary Pt1
11:36
110. Monthly Summary Pt2
12:52
111. Monthly Summary Pt3
9:34
112. Annual Summary
5:31
113. Assumptions
15:16
Recommendations
114. Recommendation Prep
5:31
115. Final Recommendation
13:49
116. Recommendation Email
4:51
117. Epilogue & Thank You
10:58
118. Bonus Accrual Update Walkthrough
10:15
Get Wall Street Prep's Private Equity Masterclass Certification
PE Masterclass learners are eligible to earn Wall Street Prep's globally recognized Private Equity Masterclass Certification. The certification is earned by successfully completing the final exam from each of the program's 3 courses. These online assessments can be taken any time after enrollment in the program.
Course Samples
PE Deal Process Introduction
PE Mini Model Walkthrough
LBO Modeling Course Welcome
LBO Modeling: Reviewing Our Model
LBO Modeling: Adding a DCF Analysis
Middle Market LBO: Managing Partner Call
Middle Market LBO: NewCo IS Adjustments
Middle Market LBO: Circularity Breaker
LBO Modeling Template
Private Equity Masterclass Highlights
Intuitive, Self-Paced and Comprehensive
Wall Street Prep's Private Equity Masterclass is intuitive and self-paced. The Private Equity Deal Process portion of the program walks users through the various stages of the PE deal process using a case study (JoeCo Coffee Company), documents such as the teaser, CIM, NDA as well as a "mini model" to show how deals are done and to teach what it takes to be a valuable part of a PE deal team. The LBO Modeling portion of the program teaches students how to build, analyze, and interpret LBO models and transactions in a step-by-step fashion using videos, readings, ready-to-use LBO models and exercises using a real case study.
Support Center
Upon enrollment, students gain free and unlimited access to Wall Street Prep's Online Support Center, where they receive answers to questions, free downloads, and important updates from a support staff comprised entirely of experienced former investment bankers.
Private Online Tutoring (Additional Fee Applies)
Want a little extra attention? Live video-chat tutoring is available with experienced real estate professionals (additional fee applies). In addition, your tutoring sessions enable you and your tutor to share models, a virtual whiteboard and any other files via an integrated web and phone platform that enhances the learning experience.
Prerequisites
The program assumes a basic introductory knowledge of accounting (e.g. interaction of balance sheet, cash flow, and income statement) and proficiency in Excel. Students with no prior background in Accounting should enroll in the Accounting Crash Course. Students with limited experience using Excel should enroll in the Excel Crash Course.
Learner Feedback
Earn CPE Credits with WSP Online Courses
Wall Street Prep is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.