WHAT WILL BE COVERED IN THIS FINANCIAL MODELING TRAINING?
LBO Case Study – Fromageries Bel
In this case study (based on a real financial modeling test given at a private equity fund), you are working at a leading private equity firm specializing in middle-market European buyouts.
You are considering a €4 billion leveraged buyout of Fromageries Bel (“Bel”), a leading pure-play cheese manufacturer with strong growth opportunities in emerging markets, especially in Africa & the Middle East and Asia.
Your firm aims to hold the company for five years and achieve a 20% IRR, and it will finance the transaction using a combination of Term Loans, Mezzanine, Equity, and Shareholder Loans.
WHAT WILL YOU LEARN?
Through this case study, you’ll learn how to analyze, model, and evaluate such a deal and answer case study questions in private equity and investment banking interviews.
You will complete the LBO model, calculate the returns to the sponsor and management team, and recommend for or against the deal. You have 90 minutes to complete the model and make a 5-sentence recommendation.
This case study is based on a real modeling test given at a European private equity fund. Among other topics, it covers Net Operating Losses (NOLs), Shareholder Loans, waterfall incentive structures, and value creation / returns attribution analysis in the context of leveraged buyouts.
Emulating real world modeling situations, you’ll determine whether or not to recommend this acquisition and you’ll be prepared to explain why or why not in a concise fashion.
CASE STUDY HOMEWORK
Use the provided template to build an LBO model for the transaction, calculate the returns to the sponsor and management team, and recommend for or against the deal. You have 90 minutes to complete the model and make a short recommendation.
Among other topics, this case study will cover Net Operating Losses (NOLs), Shareholder Loans, waterfall incentive structures, and value creation / returns attribution analysis in the context of leveraged buyouts.
You will complete each of the 8 parts in order:
PART 1 – FINANCIAL PROJECTIONS
PART 2 – TRANSACTION ASSUMPTIONS
PART 3 – CASH FLOW AND DEBT REPAYMENT
PART 4 – RETURNS CALCULATIONS
PART 5 – TAXES, NOL SCHEDULE, AND LINKS
PART 6 – MANAGEMENT INCENTIVES
PART 7 – SENSITIVITIES AND VALUE CREATION ANALYSIS
PART 8 – INVESTMENT RECOMMENDATION
Download the Homework and Get Started
1. Download Part 1 of the homework (zip file).
2. Unzip its contents.
3. Start by reading Case Study Description and follow the instructions there.
4. Then download Part 2 of the homework.
5. Unzip Part 2 contents.
6. Complete the Part 2 assignment.