Index

A

  • ability to pay
  • ABL facility. See asset based lending facility
  • accelerated depreciation
  • accountants
  • accounting
  • accounts payable
  • accounts receivable
  • accretion/(dilution) analysis
  • accretive
  • accrued liabilities
  • acquisition currency
  • acquisition-driven growth
  • acquisition financing
  • adjusted income statement
  • adjustments
    • balance sheet
    • capital expenditures
    • capital structure changes
    • management projections
    • mid-year convention
    • non-recurring items
    • purchase price and financing structure
    • recent events
    • synergies
    • year-end discounting
  • administrative agent
  • administrative agent fee
  • advisor
  • affiliate
  • affirmative covenants
  • all-cash transaction
  • amortization
    • acquisition-related
    • intangible assets, of
    • deferred financing fees, of
    • term loan
    • schedule, for term loans. See also depreciation & amortization (D&A)
  • amortizing term loans. See also term loan A
  • analysis at various prices (AVP)
  • announcement
    • earnings
    • transaction
  • annual report. See Form 10-K
  • antitrust
  • arranger
  • asset base
  • asset based lending (ABL) facility
  • asset sale,
    • gains on
    • limitations on
    • losses on
    • term loan prepayment
    • transaction
  • attorneys
  • AVP, See analysis at various prices
  • auction. See also broad auction and targeted auction

B

  • back-end short form merger
  • balance sheet
    • in LBO analysis
  • bank book
  • bank debt
  • bank lenders
  • bank meeting
  • bankruptcy
  • barriers to entry
  • Base Case
  • Base Rate
  • basic shares outstanding
  • basket
  • benchmarking analysis
    • comparable companies analysis
    • precedent transactions analysis
  • benchmark rate. See LIBOR and Base Rate
  • Berkshire Hathaway
  • beta (β)
    • relevering
    • unlevering
  • bidders. See prospective buyers
  • bidding strategy
  • Bloomberg
  • board approval
  • board of directors
  • bond investors
  • book value
    • assets
    • equity
  • bookrunners
  • borrower
  • borrowing base
  • breakage costs
  • breakeven pre-tax synergies
  • breakup fee
  • bridge loans
  • bring-down provision
  • broad auction
  • advantages and disadvantages
  • business disruption
  • business profile
  • buy-side advisory

C

  • C Corp
  • CA. See confidentiality agreement
  • CAGR. See compound annual growth rate
  • calendarization of financial data
  • calendar year
  • call date
  • call premium
  • call price
  • call protection
  • call schedule
  • callable bond
  • capex. See capital expenditures
  • capital asset pricing model (CAPM)
  • capital expenditures (capex). See also growth capex and maintenance capex
    • in coverage ratios
    • in free cash flow
    • in leverage ratios
    • limitations on
    • low requirements, for LBOs
    • projection of
  • capital markets
    • conditions
    • transactions
  • capital structure
    • effects of changes in
    • LBO financing. See also financing structure
    • optimal capital structure
    • target capital structure, for WACC
  • capitalization
  • capitalization ratio
  • CAPM. See capital asset pricing model
  • caps
  • cash and stock transaction
  • cash available for debt repayment
  • cash flow generation
  • cash flow statement
    • in LBO analysis
  • cash flow sweep
  • cash interest expense
  • cash on hand
    • funding source
  • cash return
  • CDO. See collateralized debt obligation funds
  • certainty of closing/completion
  • change of control
  • closest comparables
  • closing, of transaction
  • closing conditions
  • club deal
  • clubbing
  • COGS. See cost of goods sold
  • collar
  • collateral
  • collateral coverage
  • collateralized debt obligation (CDO) funds
  • commitment fee
  • commitment letter
  • commodity
  • common stock
  • comparable companies analysis.
    • key pros and cons
  • Competition Bureau
  • competitors
  • compound annual growth rate (CAGR)
  • confidential information memorandum (CIM)
    • sample
  • confidentiality agreement (CA)
    • provisions
  • conglomeration
  • consensus estimates.
  • consultants
  • contact log
  • contractual subordination
  • contribution analysis
  • control premium
  • conversion price
  • convertible securities
  • corporate finance
  • corporate website
  • cost of capital. See also weighted average cost of capital (WACC)
  • cost of debt
  • cost of equity. See also capital asset pricing model (CAPM)
  • cost of good sold (COGS)
    • non-recurring items in
    • projection of
  • cost structure
  • coupon
  • covenant-lite loans
  • covenants
    • incurrence
    • in definitive agreements
    • maintenance
  • coverage ratios. See interest coverage
  • credit agreement
  • credit committee
  • credit crunch
  • credit markets
  • credit profile
  • credit ratings
    • ratings scales
  • credit statistics
  • cultural fit
  • current assets
  • current liabilities
  • current report. See Form 8-K
  • current stub
  • current yield
  • customers
  • cyclical sectors
  • cyclicality

D

  • D&A. See depreciation & amortization
  • data room
    • general index
  • days inventory held (DIH)
  • days payable outstanding (DPO)
  • days sales outstanding (DSO)
  • DCF. See discounted cash flow analysis
  • D/E. See debt-to-equity
  • deal dynamics
  • deal terms
  • deal toys
  • debt capital markets
  • debt repayment
  • debt schedule
  • debt securities
  • debt-to-EBITDA
  • debt-to-equity (D/E)
  • debt-to-total capitalization
  • DEF14A. See proxy statement
  • default
  • deferred financing fees
  • deferred tax liability (DTL)
  • definitive agreement
    • key sections
  • DEFM14A. See merger proxy
  • Delaware
  • Department of Justice (DOJ)
  • depreciation
  • depreciation & amortization (D&A)
    • projection of
  • description of notes
  • DIH, See days inventory held
  • dilutive
  • discount factor
    • with mid-year convention
    • with year-end discounting
  • discount rate. See also weighted average cost of capital (WACC)
  • discounted cash flow (DCF) analysis
    • key pros and cons
  • distressed companies
  • distribution channels
  • dividend recapitalization
  • dividend yield
  • DOJ. See Department of Justice
  • Downside Case
  • DPO. See days payable outstanding
  • DSO. See days sales outstanding
  • due diligence
  • DTL. See deferred tax liability

E

  • earnings before interest after taxes (EBIAT)
  • earnings before interest and taxes (EBIT)
    • projection of
  • earnings before interest, taxes, depreciation and amortization (EBITDA)
    • projection of
  • earnings call transcript
  • earnings per share (EPS)
  • EBIAT. See earnings before interest after taxes
  • EBIT. See earnings before interest and taxes
  • EBITDA. See earnings before interest, taxes, depreciation and amortization
  • economies of scale
  • economies of scope
  • EDGAR. See Electronic Data Gathering, Analysis, and Retrieval system
  • effective tax rate
  • Electronic Data Gathering, Analysis, and Retrieval system (EDGAR)
  • EMM. See exit multiple method
  • end markets
  • end-of-year discounting. See year-end discounting
  • endowments
  • engagement letter
  • enterprise value
    • at exit, in LBO
    • calculation of
    • implied
  • enterprise value multiples
  • enterprise value-to-EBIT (EV/EBIT)
  • enterprise value-to-EBITDA (EV/EBITDA)
  • enterprise value-to-sales (EV/sales)
  • EPS. See earnings per share
  • equity contribution
  • equity investors
  • equity purchase price
  • equity research analysts
  • equity research reports
  • equity risk premium. See also market risk premium
  • equity sweetener
  • equity value
    • at exit, in LBO
    • calculation of
    • implied
  • equity value multiples. See also price-to-earnings (P/E) ratio
  • equity-linked securities. See convertible securities
  • European Commission (European Union)
  • EV/EBIT. See enterprise value-to-EBIT
  • EV/EBITDA. See enterprise value-to-EBITDA
  • EV/sales. See enterprise value-to-sales
  • exchange offer
  • exercisable
  • exercise price
  • exit multiple
    • implied
  • exit multiple method (EMM)
  • exit strategies
  • exit year
  • expenses
    • financing
    • non-cash
    • transaction

F

  • face value
  • fair market value
  • fairness opinion
    • screening for comparable companies
    • screening for comparable acquisitions
  • FASB. See Financial Accounting Standards Board
  • FCF. See free cash flow
  • Federal Funds rate
  • federal taxes
  • Federal Trade Commission (FTC)
  • fee letter
  • fiduciary duties
  • fiduciary termination
  • final bid package
  • final bid procedures letter
  • final bids
  • Financial Accounting Standards Board (FASB)
  • financial covenants. See also maintenance covenants
  • financial distress
  • financial information services
  • financial profile
  • financial sponsors
  • financial statistics
  • financing structure
    • analysis of
    • pre-packaged
  • firm value
  • first lien
  • first priority interest. See first lien
  • first round, of auction
  • fiscal year
  • Fitch Ratings
  • fixed charge coverage ratio
  • fixed charges
  • fixed costs
  • fixed exchange ratio
  • fixed price. See floating exchange ratio
  • fixed rate
  • fixed value
  • floating exchange ratio
  • floating rate
  • football field
  • Form 8-K
  • Form S-4. See also registration statement
  • Form 10-K
  • Form 10-Q. See pages for Form 10-K
  • forward LIBOR curve
  • forward multiples
  • free cash flow (FCF)
    • calculation of
    • projection of
  • friendly (deal)
  • FTC. See Federal Trade Commission
  • fully diluted shares outstanding
  • fund (pool of capital)

G

  • GAAP. See generally accepted accounting principles
  • General Electric
  • general partner (GP)
  • generally accepted accounting principles (GAAP)
  • geography
  • goodwill
  • goodwill created
  • goodwill impairment
  • GP. See general partner
  • greenfielding
  • gross margin
  • gross profit
    • projection of
  • growth capex
  • growth profile
  • growth rates
  • guarantees

H

  • Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act)
  • hedge funds
  • high yield bonds
  • historical financial data/performance
  • holding company (HoldCo)
  • horizontal integration
  • hostile (deal)
  • HSR Act. See Hart-Scott-Rodino Antitrust Improvements Act of 1976

I

  • Ibbotson
  • if-converted method
  • in-the-money
  • income statement
    • in LBO analysis
  • incurrence covenants
  • indemnification
  • indenture
  • industry. See also sector
  • information statement
  • initial bid procedures letter
  • initial bids
  • initial public offering (IPO)
  • initiating coverage reports
  • insolvency
  • institutional investors
  • institutional lenders
  • institutional term loans. See also term loan B
  • intangible assets
  • interest coverage
  • interest expense, in LBO analysis
  • interest income
  • internal rate of return (IRR)
  • Intralinks
  • intrinsic valuation analysis
  • intrinsic value
  • inventory
  • investment banks
  • investment decisions
  • investment grade
  • investment horizon
  • investor presentations
  • IPO. See initial public offering
  • IRR. See internal rate of return
  • issuer

J

  • joint proxy/registration statement
  • joint ventures
  • junior (ranking)

L

  • large-cap
  • last twelve months (LTM)
  • layering
  • LBO. See leveraged buyouts
  • LBO analysis.
  • LC. See letters of credit
  • lease
  • legal counsel
  • letters of credit (LC)
  • leverage levels
  • leverage ratios
  • leveraged buyouts (LBO).
  • leveraged loan. See also bank debt
  • levered beta
    • predicted
  • levered free cash flow. See also cash available for debt repayment
  • liabilities, long-term
  • LIBOR. See London Interbank Offered Rate
  • LIBOR floor
  • limited partnership (LPs)
  • liquidity
  • London Interbank Offered Rate (LIBOR)
  • long-term growth rate
  • LPs. See limited partnership
  • LTM. See last twelve months

M

  • M&A. See mergers & acquisitions
  • MAC/MAE. See material adverse change/effect
  • maintenance capex
  • maintenance covenants
  • make-whole provision
  • management buyout (MBO)
  • Management Case
  • management discussion & analysis (MD&A)
  • management presentation
    • sample
  • mandatory amortization/repayment
  • marginal tax rate
  • margins
  • market capitalization. See also equity value
  • market conditions
  • marketing materials. See also confidential information memorandum (CIM) and teaser
  • market risk premium
  • market share
  • market value
  • material adverse change/effect (MAC/MAE)
  • maturity
  • MBO. See management buyout
  • MD&A. See management discussion & analysis
  • merchant banking
  • merger. See also one-step merger and two-step tender process
  • merger of equals (MOE)
  • mergers & acquisitions (M&A) transaction
  • merger proxy (PREM14A/ DEFM14A)
  • mezzanine debt/financing
  • mid-cap
  • mid-year convention/discounting
  • minority interest. See also noncontrolling interest
  • MOE. See merger of equals
  • Moody's Investors Service
  • monetization
  • multiples. See trading multiples and transaction multiples

N

  • NAICS. See North American Industry Classification System
  • NASDAQ
  • NC. See non-callable
  • negative covenants
  • negotiated sale
    • advantages and disadvantages
  • negotiations
  • net debt
  • net income
  • net income margin
  • net interest expense
  • net operating loss (NOL)
  • net operating profit after taxes (NPOAT). See also EBIAT
  • net present value (NPV). See also present value
  • net share settlement (NSS)
  • net working capital (NWC)
    • projection of
  • New York Stock Exchange
  • non-callable
  • noncontrolling interest
  • non-investment grade. See also high yield bonds
  • non-recurring items
    • adjusting for
  • non-solicitation
  • NOL. See net operating loss
  • NOPAT. See net operating profit after taxes
  • normalized basis/level
  • North American Industry Classification System (NAICS)
  • notes to the financials
  • NPV. See net present value
  • NSS. See net share settlement
  • NWC. See net working capital

O

  • offer price per share
  • offer price per share-to-LTM EPS
  • Offer to Purchase
  • offer value. See also equity purchase price
  • offering memorandum
  • one-step merger
  • operating company (OpCo)
  • operating income/profit
  • operating scenarios
  • options. See stock options
  • organic growth
  • organization and preparation stage, of auction
  • out-of-the-money
  • outliers

P

  • par value
  • parent company
  • pari passu
  • payment-in-kind (PIK) interest
  • PE firms. See private equity firms
  • P/E ratio. See price-to-earnings ratio
  • P/FCF. See price-to-free cash flow
  • pension contracts
  • pension funds
  • performance drivers
  • peripheral comparables
  • permitted disclosures
  • perpetuity growth method (PGM)
  • perpetuity growth rate
    • implied
  • PGM. See perpetuity growth method
  • PIK. See payment-in-kind
  • PP&E. See property, plant, and equipment
  • PRE14A. See proxy statement
  • precedent transactions analysis.
    • key pros and cons
  • pre-closing commitments
  • preemptive bid
  • preferred stock
  • PREM14A. See merger proxy
  • premium paid
  • prepaid expenses
  • prepayments
  • present value
  • press release excerpts
    • all-cash transaction
    • announced synergies
    • cash and stock transaction
    • floating exchange ratio
    • fixed exchange ratio
  • press releases
  • price-to-earnings (P/E) ratio
  • price-to-free cash flow (FCF)
  • prime rate
  • prior stub
  • priority status
  • private acquirers
  • private equity (PE) firms
  • privately held companies
  • private placement. See Rule 144A
  • private targets
  • pro forma
    • accretion/(dilution) analysis
    • balance sheet
    • cash flow statement
    • compliance
    • income statement
    • financial data
  • products (and services)
  • profitability
  • projection period
  • property, plant, and equipment (PP&E)
  • pro-rata
    • bank debt
    • repayment
  • prospective buyers
  • prospectus (424B). See also registration statement
  • proxy statement
  • public acquirers
  • public targets
  • publicly traded companies
  • purchase consideration
  • purchase price
    • assumptions
  • purchase/sale agreement. See also definitive agreement

Q

  • qualified institutional buyers (QIBs)
  • quarterly report. See Form 10-Q

R

  • ranking
    • capital structure
    • relative to peers
  • rating agencies. See also Fitch Ratings, Moody's, and S&P
  • Ratio Test
  • redemptions
  • refinanced
  • refinancing
  • registration statement
  • Regulation FD (fair disclosure)
  • regulatory approvals
  • reinvestment risk
  • reported income statement
  • reporting period
  • representations and warranties
  • restricted payments
  • restructuring charges
  • restructurings
  • return on assets (ROA)
  • return on equity (ROE)
  • return on invested capital (ROIC)
  • return on investment (ROI)
  • revenues. See also sales
  • revolver availability
  • revolving credit facilities (revolver)
  • risk-free rate
  • ROA. See return on assets
  • roadshow
  • ROE. See return on equity
  • ROI. See return on investment
  • ROIC. See return on invested capital
  • rolled equity
  • roll-up
  • Rule 144A
  • Rule 424

S

  • S Corp
  • sale process.
  • sales
    • projection of
  • Sarbanes-Oxley Act of 2002 (SOX)
  • scale
  • Schedule 13E-3
  • Schedule 14A. See proxy statement
  • Schedule 14D-9
  • Schedule TO
  • screening
    • for comparable companies
    • for comparable acquisitions
  • SEC. See Securities and Exchange Commission
  • SEC filings
  • second lien
  • second lien term loans
  • second priority interest. See second lien
  • second round, of auction
  • section 338
  • sector
  • sector coverage
  • sector-specific multiples
  • Securities Act of 1933
  • Securities and Exchange Commission (SEC)
  • Securities Exchange Act of 1934
  • security
  • selling, general & administrative (SG&A)
    • projection of
  • sell-side advisory
  • senior (ranking)
  • senior secured. See also first lien and second lien
  • senior subordinated
  • senior unsecured
  • seniority
  • sensitivity analysis
    • DCF analysis
    • LBO analysis
    • M&A analysis
  • SG&A. See selling, general & administrative
  • share price
    • accretion/(dilution) analysis
    • implied
    • performance benchmarking
    • systematic risk
    • unaffected
  • shareholder approval
  • shareholder vote
  • shareholders' equity
  • short-form LBO model
  • SIC. See Standard Industrial Classification system
  • size, of company
    • key financial data
    • market valuation
  • size premium (SP)
  • small-cap
  • sources and uses of funds
  • sovereign wealth funds
  • SOX. See Sarbanes-Oxley Act of 2002
  • SP. See size premium
  • S&P. See Standard & Poor's
  • S&P 500
  • SPACs. See special purpose acquisition companies
  • special dividends
  • special purpose acquisition companies (SPACs)
  • Sponsor Case/Model
  • sponsors. See financial sponsors
  • spreading
    • comparable companies
    • precedent transactions
  • springing financial covenant
  • standalone
  • Standard & Poor's (S&P)
  • Standard & Poor's Leveraged Commentary & Data Group
  • Standard Industrial Classification (SIC) system
  • standstill agreement
  • stapled financing
  • state law
  • steady state
  • stock-for-stock transaction
  • stock options
  • stock price. See share price
  • stock sale
  • straight-line depreciation
  • strategic alternatives
  • strategic buyer
  • strategic fit
  • strike price. See exercise price
  • structural protections
  • structural subordination
  • stub period
  • subordination provisions
  • subprime mortgage crisis
  • sub-sector
  • sum of the parts
  • suppliers
  • syndication
  • synergies
  • systematic risk

T

  • tangible assets
  • tangible value
  • target management
  • targeted auction
  • advantages and disadvantages
  • tax basis
  • tax deductibility
  • tax expense
    • projection of
  • tax regime
  • taxable event
  • T-bills
  • T-bonds
  • teaser
  • tender premium
  • tender offers
  • tenor. See maturity
  • term. See maturity
  • term loan A
  • term loan B
  • term loan facilities
  • terminal value
  • terminal year
  • termination fee. See breakup fee
  • termination provisions
  • terms, of LBO financing
  • third lien
  • tiering
  • time value of money
  • T-notes
  • toggle cells/function
  • total interest expense
  • trading comps. See comparable companies analysis
  • trading liquidity
  • trading multiples
    • terminal value
  • trailing multiples
  • trailing twelve months (TTM). See last twelve months
  • transaction comps. See precedent transactions analysis
  • transaction multiples
  • transaction rationale
  • transaction structure
  • transaction value
  • treasury stock method (TSM)
  • triggering event
  • TSM. See treasury stock method
  • two-step tender process

U

  • underwriters
  • underwritten financing
  • undrawn
  • unlevered beta
  • unlevered free cash flow
  • unsecured
  • unsecured claims
  • unsecured creditors
  • unsecured term loan
  • unsystematic risk
  • useful life
  • uses of funds. See sources and uses of funds

V

  • valuation
    • implied by EV/EBITDA
    • implied by P/E
    • comparable companies, determination in
    • precedent transactions, determination in
    • DCF analysis, determination in
    • LBO analysis, determination in
  • valuation analysis, in sale process
  • valuation floor
  • valuation matrix
  • valuation paradigm
  • value maximization
  • variable costs
  • venture capital funds
  • vertical integration
  • vesting period

W

  • WACC. See weighted average cost of capital
  • Wall Street
  • warrants
  • weighted average cost of debt
  • weighted average cost of capital (WACC)
  • weighted average exercise (strike) price
  • working capital. See net working capital (NWC)
  • write-down
  • write-up

Y

  • year-end discounting
  • year-over-year (YoY)
    • balance sheet accounts, changes in
    • growth rates
    • NWC, changes in
  • year-to-date (YTD)
  • yield-to-call (YTC)
  • yield-to-worst call (YTW)
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