Publications

December 2012 (Revised January 2015)
Technical Note

Early Career LBOs Using the Search Fund Model

By: Howard Stevenson, Michael Roberts and Jim Sharpe

The funded search model is one alternative for individuals who, at some point in their career, want to run their own companies. This note looks at the funded search, as a means to entrepreneurship through acquisition and describes the path to buy and run a business... View Details

Keywords: Search Funds; Search; Entrepreneurial Finance; Investor Behavior; Career Planning; Entrepreneurial Management; Fundraising; Negotiation; Entrepreneurship; Capital Structure; Borrowing and Debt; Personal Development and Career; Private Ownership; Acquisition; Finance; Leveraged Buyouts

October 2006 (Revised September 2014)
Case

Summit Partners - The FleetCor Investment (A)

By: Michael J. Roberts

Part of a 3-case series in which students get to see the unfolding of due diligence on private equity (buy out) deal. In this, the A case, the deal team has negotiated a letter of intent with FleetCor, a firm that operates a fuel payment network for vehicle fleets.... View Details

Keywords: Negotiation Preparation; Private Equity; Leveraged Buyouts; Investment; Negotiation Offer; Service Industry

August 2013 (Revised December 2014)
Case

Taking Dell Private

By: David J. Collis, David B. Yoffie and Matthew Shaffer

In July 2012, Michael Dell, CEO and founder of Dell, Inc., met with a representative of Silver Lake Partners to explore taking his company private. The company, which he had founded in his dorm room as a college freshman and which had made him the youngest Fortune 500... View Details

Keywords: Strategy; Going Private; The PC Market; Market For Corporate Control; Corporate Strategy; Leveraged Buyouts; Change Management; Private Equity; Market Entry and Exit; Private Ownership; Information Infrastructure; Applications and Software; Internet and the Web; Computer Industry; Technology Industry; United States

November 1989 (Revised December 1996)
Supplement

Wisconsin Central Ltd. Railroad and Berkshire Partners (B): LBO Associations and Corporate Governance

By: Michael C. Jensen

Describes the resolution of the default situation. Further examines the internal control mechanisms and distinct role of the board of directors of a typical LBO association. View Details

Keywords: Corporate Governance; Leveraged Buyouts; Rail Industry

August 2012 (Revised July 2015)
Background Note

A Note on Valuation in Private Equity

By: Paul A. Gompers

This note will provide an overview of valuation methodologies in private equity. View Details

Keywords: Valuation; Valuation Methodologies; Private Equity; Leveraged Buyouts

29 May 2013
Research & Ideas

Faculty Symposium Showcases Breadth of Research

financial industry and those who regulate it, there are strong but conflicting viewpoints about the impact of private equity buyouts of public firms, especially in the wake of the recent global financial crisis. Some critics focus on the... View Details

Keywords: by Carmen Nobel; Financial Services

21 Nov 2006
First Look

First Look: November 21, 2006

Working PapersThe Performance of Reverse Leveraged Buyouts Authors:Jerry Cao and Josh Lerner Abstract Reverse leveraged buyouts (RLBOs) have received increased public scrutiny but attracted little... View Details

Keywords: Sean Silverthorne

February 2011 (Revised November 2011)
Supplement

Berkshire Partners: Bidding for Carter's (CW)

By: Malcolm P. Baker and David Lane

Supplemental data on comparable companies to Burger King including both public companies and similar transactions. View Details

Keywords: Leveraged Buyouts; Analytics and Data Science; Bids and Bidding; Financial Services Industry

February 1996
Exercise

Free Cash Flow Valuation Problem Set

By: William A. Sahlman and Andrew S. Janower

Free cash flow valuation problems: 1) build a simple pro forma, 2) value a public company's stock, and 3) evaluate a proposed LBO. View Details

Keywords: Leveraged Buyouts; Cash Flow; Public Ownership; Problems and Challenges; Valuation

May 1983 (Revised May 2015)
Case

The Carlton Polish Company

By: William A. Sahlman

Students are asked to determine the fair market value of Carlton Polish Co. and decide if Mr. Carlton should buy out his partner's half for $25 million. Carlton's alternative is to sell his half for $25 million. Students must also evaluate a financing plan. View Details

Keywords: Value; Financing and Loans; Partners and Partnerships; Leveraged Buyouts; Fair Value Accounting

June 2007 (Revised November 2008)
Case

Nordic Telephone Company's Bid for TDC

Nordic Telephone Company, formed by a consortium of private equity firms, has made a public tender offer for Denmark's leading telecommunications company, TDC. TDC's board of directors approved the take-private transaction, and 88% of shareholders have accepted the... View Details

Keywords: Leveraged Buyouts; Communication Technology; Decision Choices and Conditions; Negotiation Offer; Privatization; Telecommunications Industry; Denmark

03 Feb 2009
First Look

First Look: February 3, 2009

forthcoming Abstract In this essay, we review the key features of the literature on innovation and organizational structure. We highlight the key areas where work has been undertaken, as well as the limitations of the literature to date. The Performance of Reverse... View Details

Keywords: Martha Lagace

16 Sep 2014
First Look

First Look: September 16

seven large institutions. These direct investments perform better than public market indices, especially buyout investments and those made in the 1990s. Outperformance by the direct investments, however, relative to the corresponding... View Details

Keywords: Sean Silverthorne

March 1992 (Revised December 1992)
Case

Harley-Davidson, Inc.--1987

By: W. Carl Kester and Julia Morley

After an LBO and near bankruptcy in the early 1980s, Harley-Davidson makes an astonishing recovery, going public in 1986. Its listing on the New York Stock Exchange in 1987 provides the occasion of an equity analyst to publish a research report in which she must issue... View Details

Keywords: Leveraged Buyouts; Currency Exchange Rate; Reports; Crisis Management; Going Public; Research; Competition; Auto Industry; Japan; New York (city, NY)

10 Jul 2000
Research & Ideas

Entrepreneurship in Europe

buyout side and the early venture capital side in Europe, said Kuemmerle. Europe, Asia and Latin America still lag behind the U.S., he said, but "the hunt for the best entrepreneurial teams is still on, so I encourage everybody who... View Details

Keywords: by Kenneth Liss

November 2005 (Revised October 2012)
Case

The Auction for Burger King (A)

By: Carliss Y. Baldwin and James Quinn

Paul Walsh, CEO of Diageo, must evaluate bids received in an auction of the Burger King restaurant unit. Describes how Diageo came to own Burger King, the attempts to turn the unit around, the strategic reasons for its sale, the auction process, and various bidders'... View Details

Keywords: Management Teams; Leveraged Buyouts; Bids and Bidding; Valuation; Auctions; Decision Choices and Conditions; Negotiation Tactics; Service Industry; Food and Beverage Industry

April 2021
Supplement

Exercise for Revlon: Surviving Covid-19

By: Kristin Mugford and Sarah Gulick

Exercise for Revlon: Surviving Covid-19 View Details

Keywords: Leveraged Buyouts; Insolvency and Bankruptcy; Financial Liquidity; Bonds; Corporate Finance; Borrowing and Debt; Beauty and Cosmetics Industry; Financial Services Industry; United States

July 2001
Technical Note

Technical Note on LBO Valuation (A): LBO Structure and the Target IRR Method of Valuation

By: Carliss Y. Baldwin

Explains the equity cash flow method of valuation as it applies to leveraged buyouts. Also explains: 1) earnings and cash flow forecasts, 2) debt structure and the cash sweep, 3) the cashing out horizon and terminal valuation, and 4) the target IRR method of valuation. View Details

Keywords: Valuation; Leveraged Buyouts; Capital Budgeting; Borrowing and Debt; Cash Flow; Equity; Profit; Price; Forecasting and Prediction