Cours 1

Cours 3
- IB division = M&A + ECM + DCM

- PUSH : IB initiates contact

- Bridge Izy :

Cours 4
- Rappel (cf remarque prof de FAV) : durée de la période de forecast = Theoretical period until
company’s growth equals economy’s growth,
- Up to 10 year period common in practice
Rappel : FCF = EBIT(1-t) + D&A – CAPEX – Inc NWC

- Attention : pour le WACC : always use Market value !

Cours 5 :

- RETURN d’un LBO deal =

• Generally 20-25% for deals with relatively low levels of risk, higher for others
• Cash-on-cash return of two to three times, depending on hold period

Types de LBO :
- Standart LBO : collateral = actif de la société qui achète et actifs de celle achetée
- MBO = c’est le management de la company qui rachète sa propre société
- MBI = une new equipe de management arrive et remplace l’existante
- BIMBO : L’équipe de management en place hire de nouveaix man dans la team pour completer
l’operation

3 EXIT STRATEGIES
- SALE OF THE COMPANY
- IPO
- Div recap
MEZZANINE = As its name suggests, mezzanine debt refers to a layer of capital that lies between
traditional debt and equity.

ENVY RATIOWhat Does Envy Ratio Mean?

Envy ratio is the ratio between the price paid by private equity investors and the price paid by
management for their respective shareholding interest. It is used in a leveraged buyout to show how
much the management spent compared to the investing company, in proportion to the value of the
equity that each party received. It works to show which group paid more per share.

It is calculated as follows:
- Envy Ratio = (investment by investors / % of equity) / (investment by management / % of equity)
- EN GROS : LE ENVY RATIO ESY D’AUTANT PLUS ÉLEVÉ QUE LE PE FUND A ÉTÉ GÉNÉREUX

Sweet equity = preferred shares

- SELL-Off : on vent des assets à des investisseurs

- SPIN-OFF = Distribute shares of an existing subsidiary to current shareholders in the same proportion
to their shareholding in the Company : LA propriété de la subsidiary remonte aux mains des
actionnaires

- Equity CARVE OUT = IPO of some portion of the stock of a subsidiary, sometimes known as “split-off
IPO” : ON VENT DES TITRES D’UNE PARTIE DE LA FILIALE :
Splitt off & Splitt up :

Cours 7 : Attention : y a 3 types de transaction

- share sale
- asset sale
- merger

Asset deals are preferred by Buyers, whereas Sellers usually prefer share deals

Difference entre completion account & Locked box

 In locked-box, the parties agree on the Equity Value, while in Completion accounts the parties
agree on the Enterprise Value and how to get to Equity Value

Difference entre Shareholder Agre et By laws : While bylaws are mandatory and outline the governing of
the company’s operations, a shareholder agreement is optional.