The Private Equity and MBO Course

£625.00 +VAT


This course can also be presented face to face in-house or via live in-house webinar.

Private Equity and MBO Course Objectives:

Participants will:

  • Be introduced to the reasons for the growth of private equity and leveraged buyouts
  • Get an overview of the principles of leveraged finance
  • Have explained to them the use of debt to drive equity value and also how to structure the transaction
  • Be taught how to identify and close a good private equity transaction
  • Have an overview on the ideal company characteristics of an MBO candidate and how to avoid conflicts of interest

Private Equity and MBO Course Content:

The Growth of Private Equity and Leveraged Buyouts

  • Academic rationale for the use of leverage
    • Modigliani/Miller theory
    • Michael Milken’s research
  • Growth of shareholder activism
    • Reviving under performers
  • Changes in company law
  • The development of the European high yield bond and securitisation markets

The Principles of Leveraged Finance

  • The use of debt to drive equity values
    • Cash flow management
      • Reducing debt to drive equity value
  • Operational improvements
    • Building “need to have”
    • Incentivisation of management
      • Getting rich together
    • Cash-capture clauses

Exercise: Good or Bad LBO?

Discussion of recent transactions to see which ones the attendees would do, and what lessons can be learned about elements of success or failure

  • Structuring the transaction
    • Target IRR
      • Assessing the return appropriate to the risk
    • Assessing debt capacity
      • Forecasting future cash generation
    • Senior / mezzanine debt mix
      • Judging asset values
    • Forecasting exit values
  • Consideration of non-bank finance
    • High-yield bonds
      • Terms and size of issue
    • Second lien debt
      • Too much debt?
    • PIK finance
      • Saint or sinner?
    • Vendor loan notes
      • Making the deal look good

Case Study: Based on information provided attendees are tasked with structuring the finance for an MBO. Answers are discussed to identify the critical elements in the financing

  • Legal elements
    • Warranties and indemnities
      • Investor protection
    • New Memo & Arts
      • Incorporating P.E. control elements
    • Tag along and drag along clauses
      • Control of the exit
    • Veto rights for private equity
      • Control of management
  • Management
    • Jensen and Meckling agency theory
      • Why buyouts work
    • The envy ratio
      • Management incentivisation
    • Agreeing the ratchet
      • Carrot and stick
    • Good leaver / bad leaver provisions
      • Covering under performance

Exercise: Agreeing the terms of the envy ratio

Identifying and Closing a Good Transaction

  • Ideal company characteristics
    • The three golden rules
  • MBO / MBI
    • Assessing management strength
  • Meeting vendors’ expectations
    • Structuring the deal
  • Avoiding conflicts of interest
    • Recognising the risks of multi-layered financing
  • Due diligence
    • Investigation and verification
  • Tie-in with contract terms
  • Structuring the debt appropriate to the business

Discussion: How to finance the acquisition of Manchester United. The Man U accounts are reviewed with the object of deciding how to finance its acquisition. Answers are compared to the actual result.


  • Control by P.E. house
  • IPO
  • Second round financing
  • Trade sale
  • The “living dead”

Background of the trainer:

The trainer has over 40 years of City experience, encompassing banking, investment banking, M&A, and corporate finance at Citicorp, early stage investment, and corporate advisory work.  He is a director of several companies and chairman of a fast-growing software company quoted on AIM.

Besides having been a visiting lecturer at the City of London (now Cass) Business School, he has 20 years’ experience of delivering in-house training to leading banks and investment banks in the UK, Europe, Africa, Asia and the USA, and public courses in UK, Europe and Asia covering M&A, company valuation, investment banking, corporate finance and credit analysis.

Private Equity and MBO Course Summary:

The sale of companies to management teams backed by Private Equity investors, using a leveraged financing of the acquisition, has become an increasingly common feature of the corporate scene.  Whilst appearing simple to arrange, there are complex elements to a successful transaction.

This Private Equity and MBO course covers the principles and practicalities involved in arranging and negotiating a management buyout.  In addition to the legal issues to be addressed, the use of bank debt and other financial instruments is examined in the context of developing a workable structure for the deal.


What Redcliffe’s clients are saying about the course:
“Great course – went through all the various types of buyouts.”

         Senior Project Manager, The Argus Group

“Focused presentation of materials and well paced. Good interactions.”

Project Manager, BP

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“Very knowledgeable trainer, a lot of real life anecdotes that bring the theory to life.”

Corporate Finance Executive, Investec Bank plc




0/5 (0 Reviews)

5-6 participants – 20% discount,7-8 participants – 25% discount,Over 9 participants – 30% discount


25 October 2018, 17 January 2019, 11 July 2019, 14 November 2019