Savannah Paterson FINAN Case Questions #5 Toys “R” Us LBO 1. What are the risks and merits of the transaction? This LBO transaction has both risk and profit potential. KKR‚ Bain‚ and Vornado Realty Trust face risk because the industry that Toys “R” Us (toys) is currently in‚ the retail toy industry‚ is in a decline. Industry sales have been down 4% in the last year‚ and analysts don’t have a positive projection for future sales in the US. This declining industry‚ and threat of new competitors
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Innovation investment funds‚ Journal of Business Venturing 22‚ 193-235. Cumming‚ D.‚ Walz‚ U.‚ 2010‚ Private equity returns and disclosure around the world. Cotter‚ J.‚ Peck S.‚ 2001‚ The structure of debt and active equity investors: The case of the buyout specialist‚ Journal of Financial Economics 59‚ 101-147. Demiroglu‚ C.‚ James‚ C.‚ 2010‚ The role of private equity group reputation in LBO financing‚ Journal of Financial Economics 96‚ 306-330. Ellis‚ J.A.‚ Moeller‚ S.B.‚ Schlingemann‚ F.P.‚ Stulz
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..................................................................................................................................................................................... STUDENTS’ RIGHTS AND RESPONSIBILITIES Student Code of Conduct ..................................................................................................................................................................................... ...................................................................
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Bidding on the Yell Group 1. Introduction Yell Group consists of two businesses that are operating across countries. Yellow Page is a classified directory business in the UK‚ while Yellow Book is an independent directory business in the USA. These businesses are currently owned by British Telecom which is under pressure to reduce its heavy debt load and had been wavering for months about the future of these two Yellow Pages divisions. Apax Partner and Hick Muse are two private equity firms
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1. How would you describe Zara’s financial performance? Since only Inditex historical financials are shown in the case‚ we took the financials of Inditex to describe Zara’s financial performance. It is reasonable to take Inditex financial data because Zara made up 76% of Inditex’s sales in 2001. Zara (Inditex) Financial Performance in 1996-2001 1996 1997 1998 1999 2000 2001 Liquidity Ratio (current ratio) 0.81 1.00 0.88 0.87 0.90 1.02 Leverage Ratio (debt/ equity) 1.98 1.84 1
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Betas provide a convenient measure of systematic risk of the volatility of an asset relative to the market volatility. J.Choi & M.Richardson (n.d) stated that the asset volatility is time-varying and that financial leverage matters and has a large influence on equity volatility. Besides that‚ the systematic risk is defined as the probability that the financial system as a whole might become unstable‚ rather that the health of individual market participants (E.V.Murphy‚ 2012). Sometimes‚ systematic
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Final Case Write Up Details “Toys “R” Us LBO” Due Date: Last day of class (December 10‚ 2010) Teams: 1 or 2 students. Write up: This write up should be done as if you were submitting it to a superior at work. Thus you should state your main conclusions early and clearly. Messy and long exhibits should be kept to a minimum and placed in the back. Your assumptions and work in general should be easy to follow and well organized. The write up should be long enough that your arguments
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Why is the senior management of HCA pursuing an LBO of the firm? Prior to the LBO offer‚ HCA was suffering from poor market performance. The firm’s bad-debt expense was growing at a rate faster than anticipated. In 2005‚ uninsured emergency visits and uninsured admissions increased by 9.9% and 8.9% respectively‚ and it is estimated nationally that 85% of uninsured do not pay their medical bills. Moreover‚ the uninsured population was growing at a faster pace in the states HCA operated in than nationally
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Ducati & Texas Pacific Group – A ”Wild Ride” Leveraged Buyout 1. What is the nature of the opportunity? Could the Ducati brand be expanded beyond motorcycles? Why or why not? TPG strategy is to invest in undervalued firms’ that usually have been poorly managed. The investments are made in privately hold firms that are either unlisted from the beginning or that is being delisted from the stock exchange under the LBO process. TPG wants to invest in firms with a “healthy” basis but that are experience
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American Lawyer 2d yr full time possible exam – 1-1.5 on last day ------------------------------------------------- Jan. 10‚ 2012 Why take this class? * Reason 1: Leveraged acquisitions (LAs) aren’t going away * Lots of decline in 2007‚ 08‚ 09 * 10‚ 11‚ 12 little better * M&A isn’t going anywhere * LA and PE isn’t going anywhere – may decrease‚ but doubtful * Over 1 tril. avail. * Big factor: big institutional investors (pension funds
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