Step by step: Silver Lake’s $24 billion leveraged buyout of Dell

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PART 1

In this tutorial, we walk through Silver Lake’s $24 billion leveraged buyout of Dell and explain the tasks you might have to complete if you were to analyze this deal as part of a case study in a private equity interview.

Among other topics, we cover typical LBO case study questions to expect, why this particular deal was so unusual, and how to begin gathering data from industry reports, equity research, Dell’s filings and investor presentations, and other sources.

Then, we delve into how the transaction assumptions are set up, why the calculation for debt and equity is somewhat unusual, and how to factor in Michael Dell’s equity rollover and cash contribution and the company’s own excess cash usage.

Finally, we conclude with a discussion of the Sources & Uses schedule and how that works, plus a description of the different types of debt used in the transaction.

PART 2

Silver Lake’s $24 billion leveraged buyout of Dell and explain the tasks you might have to complete if you were to analyze this deal as part of a case study in a private equity interview.

In Part 2 of the case study, we go into how you might project revenue and expenses for Dell, how to come up with different scenarios, and how to use “channel checks” to come up with numbers that are different from consensus estimates.

We also cover briefly how to link the 3 financial statements and ensure that these assumptions and scenarios flow through everything properly.

Please see the link at the top of this description to get all the Excel files and PDFs and other resources.

Read more FULL ARTICLE

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