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UVA Case F-1639 – VALUATION OF LATE-STAGE COMPANIES AND BUYOUTS By Class 1:20PM on Wednesday 4/17, the deliverables for this assignment are BOTH: (1) the completed excel model submitted for the case credit AND (2) the discussion board posting detailing the results of your new financing structures and related IRR outcomes. Read the CASE UVA-F-1639 – VALUATION OF LATE-STAGE COMPANIES AND BUYOUTS.pdf and use the case as the source for company financial projections, financing structure and sources/uses for the NewCo leveraged buyout transaction, and use the LBO Analysis – Model Excel Template.xlsx Download LBO Analysis – Model Excel Template.xlsx Download LBO Analysis – Excel Template.xlsxlinked herein and posted to Canvas under Chapter 5 to complete the LBO model under the terms, price, and structure in the UVA 1639 Case. Tips on using the model. Yellow highlighted areas/blue fonts and are INPUTS, black fonts are CALCULATIONS run by the model. Enter the historical financials and drive the projections from the Assumptions tabs. Be sure not to hard code an input in what should be a dynamic calculation. Also do the eyeball test to make sure the trends and forecasts are in line and check any outliers that catch your eye. As in the real world, not all information may be known – so make educated assumptions if needed and footnote/use comments in excel for follow-up questions/clarifications, as needed – to support your analysis. Follow the Chapter 5 LBO model steps to input the financial data and transaction details into the model template. When the model is running properly and replicates the transaction proposed in the Case – Revenues, EBITDA, Net Income, Balance Sheet items, and IRR, etc. tie closely to the details of the Case – be sure to save that version as “Last Name – UVA1639 Case_Model.” As a reminder, it is always good form while modeling to continuously/regularly save versions and continue working under new versions_v2, v3, etc. You’ll use the Financing Structure 1 on Tab A3 for the LBO as proposed in the Case and, once the model is running properly, you’ll then create 2 additional potential Financing Structures on Tab A3 by varying a combination of senior and total leverage levels by 1x–3x EBITDA (or push more) resulting in (1) one new structure at higher total leverage and (2) one at lower total leverage – obviously these will also result in new equity contributions (as the purchase price from the case won’t change), and correspondingly will impact the resulting IRRs. At this point, record in a list or table the detailed outcomes of your new higher/lower leverage financing structures and each of the corresponding IRRs. Then also vary the interest rates up by 150bps-250bps (or more) on the higher leverage and down by 150bps-250bps (or more) on the lower leverage financing structure. Again, at this point, record the new IRRs corresponding to the higher/lower interest rates on the new financing structures. With these new Financing Structures in the model, please save the model under “Last Name_UVA1639 Case_Model_Structures” to submit for individual case credit by Class/1:20PM on Wednesday 4/17. Also, by Class/1:20PM on Wednesday 4/17, please post to the Discussion Board on this topic the list/table with descriptions of your 2 new financing structures detailing the breakdown of Senior and Total Leverage, the related Equity Contribution, and the corresponding IRRs for each structure, before and after the interest rate changes. Please do not post models to the discussion board. Again, the deliverables for this assignment are BOTH (1) the final “Last Name_UVA1639 Case_Model_Structures v?” excel model submitted for the Case credit AND (2) the Discussion Board posting with the list/table descriptions of your 2 new financing structures including the IRR outcomes for (a) your new higher leverage structure with (b) higher interest rates, and (c) your lower leverage structure with (d) lower interest rates. There is an LBO_Analysis_Completed.xls Download LBO_Analysis_Completed.xls Download LBO Analysis – Excel Template Completed.xlsxtemplate available as an example. There is also a LBO_Analysis_User_Guide.ppt which steps through the model template similar to the book and the Chapter 5 PowerPoint Presentation.ppt also walks through the LBO model steps, each of which may be helpful. This is an INDIVIDUAL assignment. You can discuss the modeling concepts among peers, but do not share work/spreadsheets. Late submissions will not be accepted. Please let me know if you have any questions.
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