LBO

Investment Banking Slide Examples of LBO

Tl;dr: Part of a collection of real examples of M&A investment banking slides. This blog covers LBO. See the PowerPoint presentations investment bankers are paid millions for. No matter your job, or your aspirations, you can learn from these slides.

This is part of a collection of 67 free M&A presentations from the top 20 banks (based on ranking, and also the quality of presentation for you to learn from).

Collection of M&A slide examplesc

The main page for all the M&A resources is here.

I have broken out 827 examples of slides across 32 sections. You can click through to the section you want to learn about next here:

Company Overview
Corporate Structure
Management Projections
Research Analyst
Comparison Financial Projections
Analysis At Various Prices
Share Price Analysis
Volume Weighted Average Price
Regression Analysis
Discounted Cash Flow
Weighted Average Cost Of Capital
Comparable Companies
Comparable Transactions
Dividend Discount Model
Leveraged Buy Out
Premiums Paid
Sum Of The Parts
Football Field
Executive Summary
Offer Summary
Offer Comparison
Accretion DilutionĀ 
Exchange Ratio And Contribution Analysis
Shareholder Analysis
Ability To Pay
Synergy
Strategic Options
Transaction Case Study
Next Steps
Disclaimer
Full valuation
Sales Pitches

Is this blog for you?

Why the heck should you care? Investment banks (historically) attracted the best and the brightest.

  • Slide structure/design: Learn how complicated concepts are structured and designed in PowerPoint
  • Analysis approach: See exactly how complex financial methods are presented
  • Strategy and communication: M&A deals are not (normally, other than many Duff and Phelps decks) cookie cutter. There’s a host of topics that need to be dealt with
  • Morbid interest: I used to do this for a living, but it’s still interesting to see how PPT are made… but then maybe it’s just me and so FML šŸ˜‰

Who this will help:

  • You want to work in banking: There’s a lot of applicants. Knowing the job helps you answer questions
  • You work in banking: Even if you’re an MD, you need to know how the best are structuring their thoughts/analysis
  • You write presentations: You can’t buy learnings like this. You can learn from the slides
  • You have a curious mind: Good for you

About LBO

LBOs mean Leveraged Buy Out. They were all the rage in the 80s and synonymous with corporate raiders. There are two parts:

  • Leverage: This means taking on the maximum possible amount of debt
  • Buy out: Means buying a company and taking control of it

The basic principle around LBO is to:

  • Buy low and sell high by ideally increasing the valuation multiple
  • Cost-cutting and operational improvements to increase free cash flow

This is a very gross simplification, ok.

Why these slides are made

For a corporate, a LBO is basically one way to acquire a company. Rather than just using cash and issuing stock, you take on a load of risky debt. If you take on debt the acquisition can be termed a LBO. I don’t know if there is a point at which the term applies?

You more likely relate LBO to financial sponsors, AKA PE (Private Equity) firms such as Carlyle or Permira. It’s literally their business model to use debt to ‘leverage’ returns by acquiring companies with debt, doing operational stuff, and then selling it off a few years later.

So LBO is a transaction structure, for your purposes, it’s a crap tonne of work for you to do. I’ve studied and made some LBO models for fun, but I’ve never done an LBO. In fact, I think the only times I heard people talk about LBOs were all the analysts in the Industrials team staying late and learning how to build them so they could jump ship to PE. I’m not joking.

So you do an LBO if the client wants to do one, or it’s a potential option and they want to see what the financial implications of it are. The mechanics are similar to the normal M&A models you will make, the real difference is that you have a lot of debt inputs to put in and you care about the amount of interest the client will have to cover (the ratios to debt etc). So, the ideal M&A advisor is a top-tier firm with DCM (Debt Capital Management) who talks to lenders. You will need them to give you the market terms for senior and junior debt, etc.

Comments on making these slides

The slides are just your standard outputs, assuming you know what LBO slides look like. You spell out the assumptions, you show the inputs, the sensitivities etc. I can’t say much more than you need to learn to make an LBO model and no I’m not going to teach you.

You’ll see that there aren’t that many LBO examples on this post. That’s because they’re just not all that common (at least for the kinds of deals you need to report to the SEC). I know that there are more LBO examples in my collection of IBD presentations but I can’t think of a specific presentation that was just about an LBO- they’re almost always an afterthought and an analysis some poor analyst had to make knowing it was just to make the client happy.

Examples of LBO

LBO LBO LBO

I don’t know why 3 of the images turned black when I turned them to a JPG from a GIF. It’s an old upload to the SEC.

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