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
Alacra
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
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
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
Barra
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
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
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 IQ
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
CIM. See confidential information memorandum
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 . See also Contents
key pros and cons
Competition Bureau
competitors
compound annual growth rate (CAGR)
confidential information memorandum (CIM)
sample
confidentiality agreement (CA)
provisions
consensus estimates . See also First Call and IBES
consultants
contact log
contractual subordination
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 goods sold (COGS)
non-recurring items in
projection of
cost structure
coupon
covenant-lite loans
covenants
in definitive agreements
incurrence
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
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
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 . See also Contents
key pros and cons
distressed companies
distressed debt funds
distribution channels
dividend recapitalization
dividend yield
DOJ. See Department of Justice
Downside Case
DPO. See days payable outstanding
drop dead date
DSO. See days sales outstanding
due diligence
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 transcripts
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
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
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
Factiva
FactSet
FactSet Mergerstat
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 Call
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 partner (GP)
generally accepted accounting principles (GAAP)
geography
goodwill
goodwill created
goodwill impairment
GP. See general partner
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)
hostile (deal)
HSR Act. See Hart-Scott-Rodino Antitrust Improvements Act of 1976
I
Ibbotson
IBES (Institutional Brokers’ Estimate System)
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)
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 . See also Contents
LC. See letters of credit
lease
legal counsel
letters of credit (LC)
leverage levels
leverage ratios
leveraged buyouts (LBO). See also Contents
leveraged loan. See also bank debt
levered beta
predicted. See also Barra
levered free cash flow. See also cash available for debt repayment
LexisNexis
liabilities, long-term
LIBOR. See London Interbank Offered Rate
LIBOR floor
limited partners (LPs)
liquidity
London Interbank Offered Rate (LIBOR)
long-term growth rate
LPs. See limited partners
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
merger proxy (PREM14A/ DEFM14A)
mergers & acquisitions (M&A) transaction
mezzanine debt/financing
mid-cap
mid-year convention/discounting
minority interest. See also noncontrolling interest
Moody’s Investors Service
monetization
MSCI Barra. See Barra
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 profit after taxes (NOPAT). 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
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
OneSource
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
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 interest
PP&E. See property, plant, and equipment
PRE14A. See proxy statement
precedent transactions analysis . See also Contents
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
prime funds
prime rate
prior stub
priority status
private acquirers
private equity (PE) firms
privately held companies
private placement. See Rule
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
S
sale process . See also Contents
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
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
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 transaction
straight-line depreciation
strategic alternatives
strategic buyers
strategic fit
strike price. See exercise price
structural protections
structural subordination
stub period
subordination provisions
subprime mortgage crisis
sub-sector
sum of the parts
super-priority
suppliers
syndication
synergies
systematic risk
T
tangible assets
tangible value
target management
targeted auction
advantages and disadvantages
tax deductibility
tax expense
projection of
tax regime
taxable event
T-bills
T-bonds
teaser
sample
tender premium
tender offer
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
Thomson Reuters
Thomson Reuters SDC Platinum
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
comparable companies,
determination in
DCF analysis, determination in
LBO analysis, determination in
precedent transactions,
determination in
valuation analysis, in sale process
valuation floor
valuation paradigm
value maximization
variable costs
venture capital funds
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 diluted shares outstanding
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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