Chat with us, powered by LiveChat Two friends Harley and Davidson agree on a company deal with an implied enterprise value of $5M. Harley invests $3M. The deal is structured as all-common, and American Private Equit - Writeedu

Two friends Harley and Davidson agree on a company deal with an implied enterprise value of $5M. Harley invests $3M. The deal is structured as all-common, and American Private Equit

I need a Microsoft  Excel assignment and LBO Analysis. all the resources and contents are attached in the attachments. Please text me only if you are expert in Excel and the other techincal things, otherwise please don't waste my time.

All assignments should be written in your own words and provide examples and opinions beyond the textbook or any other source you get them from as listed in the online assignment guidelines. This is an individual assignment. For calculations show ALL your steps including calculator/Excel keystrokes and/or formulas.  It is important for full credit to explain and briefly discuss your final answers and NOT just provide a number answer only or textbook definitions or any other supplements. USE YOUR OWN WORDS. Plagiarism software will be used to compare to those and to each other. Please label your uploaded assignment file with the course and your name on the file to the online assignment link. It is important to show you work for partial credit. Remember to show all work including calculator keystrokes if using excel submit the original excel file. Also, include a brief discussion of your results using your OWN examples and opinions where applicable.

NAME: ___________________________________________________

Complete Questions Questions 1 and 2 These are the only Choices.

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1. (30% REQUIRED)

Two friends Harley and Davidson agree on a company deal with an implied enterprise value of $5M. Harley invests $3M. The deal is structured as all-common, and American Private Equity comes in and offers $8.5M million for the company. Harley owns 60% and Davidson owns 40%.

a. Set up the All-Common structure for the two partners. Calculate the payout table and discuss

b. If the deal is structured as redeemable preferred with $1,000 cheap common for the two partners, calculate the payout table and discuss

c. The deal is Convertible Preferred for the two partners. Calculate the payout table and discuss

d. What is the importance of capital structure ownership in private equity.

2. (70%) VALUATION: Perform an LBO analysis of small cap company using different types of debt to value a purchase of another company. It is important to discuss the details of what you are doing and your conclusion. If there is no debt, propose hypothetical debt that you would need to purchase the company outright. You can follow and use the Excel Spreadsheet provided on Blackboard Chapter 5 Rosenbaum Excel. Make sure this is detailed and discuss your reasoning and results.

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ValueCo Corporation
Leveraged Buyout Analysis Financing Structure: Structure 1
($ in millions, fiscal year ending December 31) Operating Scenario: Base
Transaction Summary
Sources of Funds Uses of Funds Purchase Price Return Analysis
% of Total Multiple of EBITDA % of Total Offer Price per Share -0 Exit Year 2017
Amount Sources 9/30/2012 Cumulative Pricing Amount Uses Fully Diluted Shares -0 Entry Multiple 8.0x
Revolving Credit Facility -0 – % – x – x L+425 bps Purchase ValueCo Equity $4,350.0 72.5% Equity Purchase Price $4,350.0 Exit Multiple 8.0x
Term Loan A -0 – % – x – x NA Repay Existing Debt 1,500.0 25.0% Plus: Existing Net Debt 1,250.0 IRR 20%
Term Loan B 2,150.0 35.8% 3.1x 3.1x L+450 bps Tender / Call Premiums 20.0 0.3% Enterprise Value $5,600.0 Cash Return 2.5x
Term Loan C -0 – % – x 3.1x NA Financing Fees 90.0 1.5%
2nd Lien -0 – % – x 3.1x NA Other Fees and Expenses 40.0 0.7% Transaction Multiples Options
Senior Notes 1,500.0 25.0% 2.1x 5.2x 8.500% Enterprise Value / Sales Financing Structure 1
Senior Subordinated Notes -0 – % – x 5.2x NA LTM 9/30/2012 $3,385.0 1.7x Operating Scenario 1
Equity Contribution 2,100.0 35.0% 3.0x 8.2x 2012E 3,450.0 1.6x Cash Flow Sweep 1
Rollover Equity -0 – % – x 8.2x Enterprise Value / EBITDA Cash Balance 1
Cash on Hand 250.0 4.2% 0.4x 8.6x LTM 9/30/2012 $700.0 8.0x Average Interest 1
Total Sources $6,000.0 100.0% 8.6x 8.6x Total Uses $6,000.0 100.0% 2012E 725.0 7.7x Financing Fees 1
Summary Financial Data
Historical Period Projection Period
LTM Pro forma Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
2009 2010 2011 9/30/2012 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Sales $2,600.0 $2,900.0 $3,200.0 $3,385.0 $3,450.0 $3,708.8 $3,931.3 $4,127.8 $4,293.0 $4,421.7 $4,554.4 $4,691.0 $4,831.8 $4,976.7 $5,126.0
% growth NA 11.5% 10.3% NA 7.8% 7.5% 6.0% 5.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Gross Profit $988.0 $1,131.0 $1,280.0 $1,350.0 $1,380.0 $1,483.5 $1,572.5 $1,651.1 $1,717.2 $1,768.7 $1,821.8 $1,876.4 $1,932.7 $1,990.7 $2,050.4
% margin 38.0% 39.0% 40.0% 39.9% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0%
EBITDA $491.4 $580.0 $672.0 $700.0 $725.0 $779.4 $826.1 $867.4 $902.1 $929.2 $957.1 $985.8 $1,015.4 $1,045.8 $1,077.2
% margin 18.9% 20.0% 21.0% 20.7% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0%
Capital Expenditures 136.4 114.0 144.0 152.3 155.3 166.9 176.9 185.8 193.2 199.0 204.9 211.1 217.4 224.0 230.7
% sales 5.2% 3.9% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5%
Cash Interest Expense 252.5 246.6 233.8 218.8 201.7 182.8 163.7 141.2 128.9 128.9 128.9
Total Interest Expense 263.9 258.0 245.1 230.1 213.1 194.2 175.0 151.9 135.0 128.9 128.9
Free Cash Flow
EBITDA $779.4 $826.1 $867.4 $902.1 $929.2 $957.1 $985.8 $1,015.4 $1,045.8 $1,077.2
Less: Cash Interest Expense (246.6) (233.8) (218.8) (201.7) (182.8) (163.7) (141.2) (128.9) (128.9) (128.9)
Plus: Interest Income -0 -0 -0 -0 -0 -0 0.0 1.1 3.2 5.4
Less: Income Taxes (113.6) (131.2) (148.1) (164.0) (178.5) (193.3) (209.9) (224.8) (236.2) (245.5)
Less: Capital Expenditures (166.9) (176.9) (185.8) (193.2) (199.0) (204.9) (211.1) (217.4) (224.0) (230.7)
Less: Increase in Net Working Capital (47.6) (41.0) (36.2) (30.4) (23.7) (24.4) (25.1) (25.9) (26.7) (27.5)
Free Cash Flow $204.6 $243.3 $278.7 $312.9 $345.2 $370.7 $398.4 $419.4 $433.3 $450.0
Cumulative Free Cash Flow 204.6 448.0 726.7 1,039.5 1,384.7 1,755.4 2,153.8 2,573.2 3,006.5 3,456.6
Capitalization
Cash -0 -0 -0 -0 -0 -0 -0 $3.8 $423.2 $856.5 $1,306.6
Revolving Credit Facility -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Term Loan A -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Term Loan B 2,150.0 1,945.4 1,702.0 1,423.3 1,110.5 765.3 394.6 -0 -0 -0 -0
Term Loan C -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Existing Term Loan -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
2nd Lien -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Other Debt -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Total Senior Secured Debt $2,150.0 $1,945.4 $1,702.0 $1,423.3 $1,110.5 $765.3 $394.6 -0 -0 -0 -0
Senior Notes 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0 1,500.0
Total Senior Debt $3,650.0 $3,445.4 $3,202.0 $2,923.3 $2,610.5 $2,265.3 $1,894.6 $1,500.0 $1,500.0 $1,500.0 $1,500.0
Senior Subordinated Notes -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Total Debt $3,650.0 $3,445.4 $3,202.0 $2,923.3 $2,610.5 $2,265.3 $1,894.6 $1,500.0 $1,500.0 $1,500.0 $1,500.0
Shareholders' Equity 2,040.0 2,225.3 2,439.3 2,680.9 2,948.4 3,239.7 3,555.1 3,897.6 4,264.4 4,649.7 5,050.4
Total Capitalization $5,690.0 $5,670.7 $5,641.3 $5,604.3 $5,558.9 $5,505.0 $5,449.8 $5,397.6 $5,764.4 $6,149.7 $6,550.4
% of Bank Debt Repaid -0 9.5% 20.8% 33.8% 48.3% 64.4% 81.6% 100.0% 100.0% 100.0% 100.0%
Credit Statistics
% Debt / Total Capitalization 64.1% 60.8% 56.8% 52.2% 47.0% 41.1% 34.8% 27.8% 26.0% 24.4% 22.9%
EBITDA / Cash Interest Expense 2.9x 3.2x 3.5x 4.0x 4.5x 5.1x 5.8x 7.0x 7.9x 8.1x 8.4x
(EBITDA – Capex) / Cash Interest Expense 2.3x 2.5x 2.8x 3.1x 3.5x 4.0x 4.6x 5.5x 6.2x 6.4x 6.6x
EBITDA / Total Interest Expense 2.7x 3.0x 3.4x 3.8x 4.2x 4.8x 5.5x 6.5x 7.5x 8.1x 8.4x
(EBITDA – Capex) / Total Interest Expense 2.2x 2.4x 2.6x 3.0x 3.3x 3.8x 4.3x 5.1x 5.9x 6.4x 6.6x
Senior Secured Debt / EBITDA 3.0x 2.5x 2.1x 1.6x 1.2x 0.8x 0.4x – x – x – x – x
Senior Debt / EBITDA 5.0x 4.4x 3.9x 3.4x 2.9x 2.4x 2.0x 1.5x 1.5x 1.4x 1.4x
Total Debt / EBITDA 5.0x 4.4x 3.9x 3.4x 2.9x 2.4x 2.0x 1.5x 1.5x 1.4x 1.4x
Net Debt / EBITDA 5.0x 4.4x 3.9x 3.4x 2.9x 2.4x 2.0x 1.5x 1.1x 0.6x 0.2x

IS

($ in millions, fiscal year ending December 31)
Income Statement
Historical Period Projection Period
LTM Pro forma Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
2009 2010 2011 9/30/2012 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Sales $2,600.0 $2,900.0 $3,200.0 $3,385.0 $3,450.0 $3,708.8 $3,931.3 $4,127.8 $4,293.0 $4,421.7 $4,554.4 $4,691.0 $4,831.8 $4,976.7 $5,126.0
% growth NA 11.5% 10.3% NA 7.8% 7.5% 6.0% 5.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Cost of Goods Sold 1,612.0 1,769.0 1,920.0 2,035.0 2,070.0 2,225.3 2,358.8 2,476.7 2,575.8 2,653.0 2,732.6 2,814.6 2,899.1 2,986.0 3,075.6
Gross Profit $988.0 $1,131.0 $1,280.0 $1,350.0 $1,380.0 $1,483.5 $1,572.5 $1,651.1 $1,717.2 $1,768.7 $1,821.8 $1,876.4 $1,932.7 $1,990.7 $2,050.4
% margin 38.0% 39.0% 40.0% 39.9% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0%
Selling, General & Administrative 496.6 551.0 608.0 650.0 655.0 704.1 746.4 783.7 815.0 839.5 864.7 890.6 917.3 944.9 973.2
% sales 19.1% 19.0% 19.0% 19.2% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0%
Other Expense / (Income) -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
EBITDA $491.4 $580.0 $672.0 $700.0 $725.0 $779.4 $826.1 $867.4 $902.1 $929.2 $957.1 $985.8 $1,015.4 $1,045.8 $1,077.2
% margin 18.9% 20.0% 21.0% 20.7% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0% 21.0%
Depreciation 116.0 121.5 145.0 150.0 155.3 166.9 176.9 185.8 193.2 199.0 204.9 211.1 217.4 224.0 230.7
Amortization 39.0 43.5 48.0 50.0 51.8 55.6 59.0 61.9 64.4 66.3 68.3 70.4 72.5 74.7 76.9
EBIT $336.4 $415.0 $479.0 $500.0 $518.0 $556.9 $590.3 $619.8 $644.6 $663.9 $683.8 $704.3 $725.5 $747.2 $769.6
% margin 12.9% 14.3% 15.0% 14.8% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%
Interest Expense
Revolving Credit Facility -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Term Loan A -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Term Loan B 123.6 117.7 104.9 89.9 72.8 53.9 34.8 12.3 -0 -0 -0
Term Loan C -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Existing Term Loan -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
2nd Lien -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Senior Notes 127.5 127.5 127.5 127.5 127.5 127.5 127.5 127.5 127.5 127.5 127.5
Senior Subordinated Notes -0 -0 -0 -0 -0 -0 -0 -0 -0 -0 -0
Commitment Fee on Unused Revolver 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3
Administrative Agent Fee 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
Cash Interest Expense $252.5 $246.6 $233.8 $218.8 $201.7 $182.8 $163.7 $141.2 $128.9 $128.9 $128.9
Amortization of Deferred Financing Fees 11.3 11.3 11.3 11.3 11.3 11.3 11.3 10.7 6.1 -0 -0
Total Interest Expense $263.9 $258.0 $245.1 $230.1 $213.1 $194.2 $175.0 $151.9 $135.0 $128.9 $128.9
Interest Income -0 -0 -0 -0 -0 -0 (0.0) (1.1) (3.2) (5.4)
Net Interest Expense $258.0 $245.1 $230.1 $213.1 $194.2 $175.0 $151.9 $133.9 $125.7 $123.5
Earnings Before Taxes 298.9 345.2 389.7 431.5 469.7 508.8 552.4 591.5 621.5 646.2
Income Tax Expense 113.6 131.2 148.1 164.0 178.5 193.3 209.9 224.8 236.2 245.5
Net Income $185.3 $214.0 $241.6 $267.5 $291.2 $315.5 $342.5 $366.8 $385.3 $400.6
% margin 5.0% 5.4% 5.9% 6.2% 6.6% 6.9% 7.3% 7.6% 7.7% 7.8%
Income Statement Assumptions
Sales (% YoY growth) NA 11.5% 10.3% NA 7.8% 7.5% 6.0% 5.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
Cost of Goods Sold (% margin) 62.0% 61.0% 60.0% 60.1% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0%
SG&A (% sales) 19.1% 19.0% 19.0% 19.2% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0%
Other Expense / (Income) (% of sales) – % – % – % – % – % – % – % – % – % – % – % – % – % – % – %
Depreciation (% of sales) 4.5% 4.2% 4.5% 4.4% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 4.5%
Amortization (% of sales) 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%
Interest Income 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5%
Tax Rate 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0% 38.0%

BS

($ in millions, fiscal year ending December 31)
Balance Sheet
Projection Period
Opening Adjustments Pro Forma Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
2012 + 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Cash and Cash Equivalents $250.0 (250.0) -0 -0 -0 -0 -0 -0 -0 $3.8 $423.2 $856.5 $1,306.6
Accounts Rec

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