MFIN2235 Lecture Notes - Lecture 1: Keurig Green Mountain, Equity Office, Warburg Pincus
Document Summary
Provider of affordable eyeglasses - 750 retail locations, recently ipod. One of 6 ipos to launch in the week they went public. Ipo exit from lbo done by kkr in 2014 (bn value) 2005: berkshire partners leads lbo of nv (~190mm) Kkr"s lbo a little unique, as nv was already private / mgmt already held stake. Merger negotiations fell through; softbank walking away (owns majority of sprint) 2% annual mgmt fee on invested capital: meant to cover salaries and overhead. 20% of profits (subject to clearing a hurdle rate, ex. Ex. if a bn investment turns into . 5bn, the pe shop would get 20% x mm = mm. Or, if there was a hurdle rate of 8%, they would get 20% x [1. 5-1(1. 08)t] --- carry / Infinite return for pe managers, given that they usually don"t typically put in equity. Lbo steps: locate / analyze information, build pre-lbo model (essentially a dcf forecast)
