Private Equity: Leveraged Buyouts (LBOs)
What you'll learn
- Private Equity Investment Process
- Leveraged Buyout (LBO) Transactions in Private Equity, Illustrated with a Real-Life Case
- LBO´s Value Drivers: Growth in EBITDA, Multiple Arbitrage, and Leverage
- Adjusted Present Value (APV) Method
- This is an intermediate level finance course. Students should be able to calculate Free Cash Flows and Net Present Value
*** You will have full access to the spreadsheets used in the videos ***
Welcome to the Private Equity course, where you will learn to evaluate leveraged buyout transactions. My name is Carlos Martínez, I have a Ph.D. in Management from the University of St. Gallen. During my doctoral studies, I delved into access to entrepreneurial financing in contexts with institutional voids, research that I presented at some of the most prestigious academic conferences and doctoral colloquiums held at the University of Tel-Aviv (Israel), Politecnico di Milano ( Italy), University of Halmstad (Sweden) and MIT (USA), and which was also partially published as a chapter of the book "New Frontiers in Entrepreneurial Finance Research," co-edited by established Professors in the Entrepreneurial Finance literature.
Upon completion of this course, you will learn about the investment process used by general partners of private equity firms. Furthermore, you will be able to evaluate leveraged buyout transactions using the adjusted present value method. These skills will be useful if you are a university student or young professional interested in pursuing a career in investment banking, corporate finance, or consulting.
This is a very comprehensive course, including presentations, tutorials, and assessments. The course has a practical approach and uses the teaching case method, so you will have to evaluate a private equity transaction from two perspectives: on the one hand, from that of a Corporation evaluating selling one of its division and on the other hand, from that of a private equity firm evaluating acquiring such division.
We will start the course with a theoretical introduction to private equity and its investment process. Then, we will present the teaching case based on the leveraged buyout of DuPont´s Coatings Division and will first make a qualitative analysis of the investment, illustrating the different value drivers in this type of transaction, namely the growth in EBITDA, multiple arbitrage, and financial leverage. After that, we will elaborate an Excel model with different valuation scenarios, to which you will have full access.
Leveraged Buyouts in Private Equity is a topic generally covered in the corporate finance course at the undergraduate level and the finance for entrepreneurs course at the graduate level. The ideal participants of this course are university students and young professionals related to business, finance, accounting, law, and even from other academic areas interested in pursuing a career in investment banking, corporate finance, and financial consulting. This is an intermediate level course, requiring a basic understanding of free cash flows and the net present value method.
Feel free to take a look at the course description and I am looking forward to seeing you soon!
Who this course is for:
- University students and young professionals interested in pursuing a career in corporate finance, private equity and financial consulting
(English profile below)
Carlos es un apasionado del método de casos de enseñanza, coautor de más de 25 de ellos en las áreas de finanzas, estrategia, operaciones y desarrollo sostenible. Algunos de estos han sido incluidos en las bases de casos de prestigiosas escuelas de negocio como Harvard, Michigan e IESE.
Es Ingeniero Industrial y Master en Finanzas de la Universidad Centroamericana, MBA con distinción de INCAE Business School y Ph.D. en Management de la Universidad de San Galo, Suiza. Ha orientado su investigación hacia el impacto de la información social, ambiental, y de gobierno corporativo (ESG) en los mercados financieros. También ha desarrollado estudios relacionados con el acceso al financiamiento emprendedor en contextos con vacíos institucionales.
Su investigación ha sido presentada en prestigiosas conferencias como el coloquio doctoral del Alliance for Research on Corporate Sustainability (MIT, EEUU), la conferencia especializada “From start-up to scale-up” del Academy of Management (University of Tel-Aviv, Israel), la tercera conferencia en Entrepreneurial Finance (Politecnico de Milano, Italia) y el Congreso Anual del European Accounting Association (Valencia, España).
Carlos es coautor de cinco artículos en revistas científicas arbitradas (peer-reviewed) y dos capítulos en libros de editoriales de prestigio (Edward Elgar y World Scientific Publishing). Su investigación ha sido citada por el International Integrated Reporting Council en documentos dirigidos a inversionistas institucionales. Adicionalmente, ha sido revisor ocasional de artículos científicos para varias revistas arbitradas.
Carlos is passionate about the teaching case method and has co-authored more than 25 of them in the areas of finance, strategy, operations, and sustainable development. Some of these have been included in the case bases of prestigious Universities such as Harvard and Michigan.
He is an Industrial Engineer and Master in Finance from Central American University. He also has an MBA with honors from INCAE Business School, and a Ph.D. in Management from the University of St. Gallen, Switzerland. Carlos has oriented his research towards the impact of social, environmental, and corporate governance (ESG) information on financial markets. He has also developed studies related to access to entrepreneurial financing in contexts with institutional voids.
His research has been presented at relevant conferences such as the doctoral colloquium of the Alliance for Research on Corporate Sustainability (MIT, USA), the specialized conference “From Start-up to Scale-up” of the Academy of Management (University of Tel-Aviv, Israel ), the third conference on Entrepreneurial Finance (Politecnico de Milano, Italy) and the Annual Congress of the European Accounting Association (Valencia, Spain).
Carlos has co-authored five articles in peer-reviewed journals and two chapters in books from prestigious publishers (Edward Elgar and World Scientific Publishing). His research has been cited by the International Integrated Reporting Council in documents aimed at institutional investors. Additionally, he has been an occasional reviewer of scientific articles for several peer-reviewed journals.