Investment Banking World 219
Negotiate the key terms, payment structure, and risk allocation of the take-private deal between the publicly traded investment management firm and prospective tier-one buyers.
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World Files
Tasks (14)
Please calculate the DCF value per share applying the midyear convention. Keep all other assumptions the same in the existing model. Provide your answer right here, rounded to the nearest cent
Using the LBO model, what would the revenue growth % in 2025E have to be to yield an IRR of 20.0% in 2029E? Round to 2 decimal places. Reply to me in here please.
Using the DCF calculate the implied levered FCF yield for CNS in 2030E for (1) the perpetuity growth method and (2) the exit multiple method. Assume a 10% WACC, 2% terminal growth rate, and an 11x exit multiple. Provide values to one decimal place. Write out your reply to me here.
From the LBO, assume a 15% premium is offered to CNS holders and max transaction leverage of Term loan B is $1,040. What is the revised IRR and MoM for 2029E, rounded to one decimal place? Reply here.
Provide the mean implied equity value for CNS from the Comparables and Precedents using 2025E EBITDA, as well as the implied equity value from the DCF and LBO using the base DCF and assumed offer price. Provide the results of all four methods and the mean in $ million, to one decimal place. Give it as a message right here.
Your task is to evaluate the impact of financing constraints on Project Vanguard's take-private economics and develop a revised LBO case reflecting a capped leverage scenario using the LBO model. • Term Loan B (TLB): cap maximum proceeds at $1,250 MM • Adjust Sponsor Equity so that Total Sources = Total Uses, maintaining a constant enterprise value (EV) at entry (excluding fees and cash to balance sheet). • Exit Multiple: assume 2030E Exit Multiple of 18.5x In the existing LBO model, I want you to compute the Implied Adj. EBITDA Entry Multiple (2024A). Label this calculation as: “Implied Adj. EBITDA Entry Multiple (2024A)”. Also, create a 2x2 sensitivity tables for Sponsor IRR (%). Set rows as: Premium to Current (15.0%, 25.0%) and columns as: Exit Multiple (17.5x, 18.5x). Populate the tables with recalculated IRR values based on the revised capital structure reflecting the Term Loan B cap. Round the final results to one decimal place and keep the same formatting as the original sensitivity table.
Assume that CNS has been taken private as of the start of FY25E. The new PE owners have decided to reduce employee compensation by 50% of the value of stock-based compensation in the previous LBO forecast (when CNS was a public company). Based on this, calculate the revised DCF per share valuation of CNS. Keep all assumptions the same per the DCF base case. Provide your response right here, rounded to the nearest cent.
Using the precedents and DCF analysis calculate an implied share price for CNS to 2 decimal places. Exclude transactions where the target had <$90 B in AUM. Using the forward EBITDA from the DCF, assume a 10% increase in total expenses and only a 5% increase in Depreciation and amortization. Edit the existing sheet to provide the share price build (EV / EBITDA, 2025E EBITDA, Implied EV, Net Debt, Implied Market Cap, FDSO and share price), starting in the 'Precedents' tab. Round all values to 2 decimal places.
Can we see what the DCF per share value is if the terminal value is based on EV / AUM of the peer set? Let's exclude AMG and JHG for purposes of this exercise. Assume that AUM grows linearly with management fees, round to the nearest cent. Print your answer back here.
What is the EV and implied share price of CNS in the DCF model using both Gordon growth model and exit multiple approach if each business segment grows as outlined below over the projection period of 2025 to 2030? Segment 1 - Investment advisory and administration fees grows at 7.0% revenue growth per annum Segment 2 - Distribution and service fees grows at 6.0% revenue growth per annum Segment 3 - Other grows at 5.0% revenue growth per annum Output the following to me with a short message in reply: 1. EV using the Gordon growth method 2. Implied share price using the Gordon growth method 3. EV using the exit multiple approach 4. Implied share price using the exit multiple approach Report share price in $ and to 2 decimal places, report EV in whole number and in millions. For operating expenses and capex use the Operating Assumptions (provided as a % of total revenue) laid out in the “LBO Model-hardcoded” tab.
Using a discounted cash flow (DCF) model, what is the implied share price under the following assumptions: - Revenue growth is 2.0 percentage points lower than the current growth rates in each year from 2025 to 2030. - Employee compensation and benefits as a percentage of revenue are 2.0 percentage points higher than the current figures in each year from 2025 to 2030. - Mid-year convention is used. I want you to (1) Tell me the implied share price using the Gordon Growth Method. Then, (2) tell me the implied share price using the Exit Multiple Approach. Reply to me with a message outlining these values in USD, rounded to two decimal places.
Using the LBO model calculate FY2025 interest expense and the corresponding FY2025 Adj. EBITDA / Interest Coverage ratio based on the capital structure sized at 4.5x entry gross leverage (Gross Debt / FY2024 Adj. EBITDA). Assume the transaction closes in FY2024 and the sponsor holds the asset through the 2030E exit. Round the dollar values to whole numbers and multiples to one decimal point. Respond here with a short message.
Management believes that the appropriate valuation of the DCF terminal value is the EV / mgmt. fees portfolio multiple of the asset managers peer set per the comparables analysis excluding JHG and AMG. Calculate CNS's implied terminal growth rate using that approach. Keep all other assumptions the same per the DCF base case. Provide your findings as a message here, rounding percentage values to 2 decimal places.
Output two values for me: 1. The implied share price using the Gordon growth method 2. The implied share price using the exit multiple approach You will need to update the DCF model with the following changes to get the right answer: 1. Change depreciation and amortization as a percentage of total revenue from 2025 to 2030 to the same rate as 2024 2. Change Total current assets as a percentage of total revenue from 2025 to 2030 to the same rate as 2024 3. Change Total current liabilities as a percentage of total revenue from 2025 to 2030 to the same rate as 2024 4. Change revenue growth from 2025 to 2030 to the same rate as revenue growth between 2023 and 2024 5. Change distribution and service fee to 15% of the total revenue from 2025 to 2030 Respond with a short message here. Report share price in $ and round it to 2 decimal places