Business: LBO memo

Interview rounds in Finance, M&A (mergers and acquisitions)

LBO questions

  • define Leveraged buyout
  • who are the legal parties in a LBO deal?
  • what are the benefits of doing LBO?
  • why LBOs are done?
  • walk through a basic LBO model

Mention a few notable LBOs in 2010s around the world.

Explain the vision in these deals.

Were these deals anticipated or did they come as a surprise for the public?

Theory of Leveraged Buyouts

  • LBO models
  • case studies
  • modeling of future merged company

Basics of a LBO, terminology on the process

LBO finance terminology

  • leverage
  • debt
  • mezzanine loan
  • equity
  • return on a LBO deal
  • enterprise value (EV) of a corporation
  • senior note
  • subordinate note
  • seed
  • capital
  • money-on-money (MoM)
  • multiples

Next part, we’re looking at a few continuation intros; the Clear Channel M&A deal and also think about the role of interest (i) in LBO metrics.

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