Capital Structure and Leverage in Private Equity Buyouts

2021 ◽  
Vol 33 (3) ◽  
pp. 42-58
Author(s):  
Greg Brown ◽  
Robert Harris ◽  
Shawn Munday
Keyword(s):  
Capital Structure ◽  
Private Equity

Private Equity in Denmark: Capital Structure and Taxes

2011 ◽  
pp. 555-578
Author(s):  
Morten Bennedsen ◽  
Kasper Meisner Nielsen ◽  
Søren Bo Nielsen ◽  
Steen Thomsen
Keyword(s):  
Capital Structure ◽  
Private Equity

scholarly journals Transportation Infrastructure Project Financing; Highways Capital Structure Design Techniques

2021 ◽  
Vol 2021 ◽  
pp. 1-8
Author(s):  
Hanieh Soleymani ◽  
Mehdi Ravanshadnia ◽  
Mehdi Montazer
Keyword(s):  
Capital Structure ◽  
Private Equity ◽  
Stopping Time ◽  
Structure Optimization ◽  
Optimization Methods ◽  
Structure Design ◽  
Traditional Model ◽  
Steady Growth ◽  
The Status ◽  
Infrastructure Project

Whether a private bidder can win a concession depends largely on advanced financial engineering techniques, numerous methods were developed. Meeting large infrastructure needs including its proper maintenance and operation is and will remain a major challenge for the all-around the in the coming years requiring targeted innovative financing mechanisms. Even though it is recognized that there are three types of financial instruments, equity, mezzanine finance and debt in funding an infrastructure project, the status quo is that previous capital optimization methods did not consider mezzanine finance or simply categorized it into debt-like or equity-like instruments. The global infrastructure sector is witnessing a steady growth of private equity investment in mezzanine instruments. The frequent usage of the contingent claim embedded in mezzanine financing makes the traditional model for capital structure optimization invalid. This study presents a more advanced method to optimize capital structure in infrastructure financing. This easily implemented method is based on a two-stage procedure: I) identification of optimal stopping time for convertible securities, and II) capital structure optimization by a conventional model. The quantitative optimization model can be easily generalized. The global infrastructure sector is witnessing the continued growth of a private equity fund of mezzanine tools. Repeated use of potential claims embedded in mezzanine financing has invalidated the traditional model for optimizing capital structure.

The Restructuring of Danfurn LLC1

2017 ◽  
pp. 1-10
Author(s):  
David C. Smith ◽  
Larry G. Halperin ◽  
Michael Friedman
Keyword(s):  
Capital Structure ◽  
Corporate Finance ◽  
Financial Distress ◽  
Private Equity ◽  
Law School ◽  
Legal Rights ◽  
University Of Virginia ◽  
Case Discussion ◽  
Stakeholder Groups ◽  
The University

This case is taught at the University of Virginia McIntire School of Commerce in the fourth year course, “Corporate Restructuring.” The case is suitable for advanced undergraduates or MBS students that have already completed a course in corporate finance or valuation. The material would fit well in a second Corporate Finance class, particularly if the instructor would like to devote some time to discussing financial distress and restructuring. It could also work well in a business reorganization class at a law school. Danfurn LLC is a U.S. manufacturer and retailer of high-end furniture that is in financial distress following a 2007 LBO and subsequent declines in profitability in the wake of the financial crisis of 2007–08. The nearly 50-year-old company has recently blown through cash flow covenants on its $100 million senior financing facility and is seeking a restructuring of its capital structure that will allow the company to survive. Although Danfurn's lenders are hopeful that a consensual decision can be reached on how to restructure the company without resorting to a bankruptcy filing, filing for bankruptcy or even liquidating the company are very real possibilities. This case is an exercise in negotiating a consensual restructuring of a financially distressed company when stakeholders have varied incentives, legal rights, potential remedies, and interests in how the company will be managed going forward. The case discussion works best if students are divided into groups representing the different stakeholder groups—the senior lender, mezzanine lender, board, private equity owner, and founder interests—and are asked to think about how best to maximize their positions while recognizing the costs of failing to reach a negotiated outcome.

scholarly journals Investment funds and underpricing of shares

2019 ◽  
Vol 26 (4) ◽  
pp. 369-388
Author(s):  
Hitalo Alberto de Souza Faria Castilho ◽  
Matheus Souza De Resende ◽  
Eduardo Ramos de Oliveira Franco Montoro ◽  
Vinicius Akio De Almeida Shotoko ◽  
Michele Nascimento Jucá ◽  
...  
Keyword(s):  
Capital Structure ◽  
Information Asymmetry ◽  
Initial Public Offering ◽  
Private Equity ◽  
Sampling Period ◽  
Cross Sectional ◽  
Investment Funds ◽  
Content Type ◽  
The Moment ◽  
Public Offering

Purpose The purpose of this paper is to assess whether greater participation of venture capital/private equity (VC/PE) funds in the companies’ capital structure at the moment of initial public offering (IPO) contributes to the reduction in the underpricing of their shares. Design/methodology/approach Descriptive statistics, correlation analysis, mean difference test and cross-sectional regression were used. The final sample consisted of 89 companies making IPO in Brasil Bolsa Balcão between 2007 and 2017. Findings The participation of VC/PE funds was shown to mitigate the effect of information asymmetry on managers and shareholders, thus reducing the underpricing of companies at the moment of IPO (H1). However, the expectation that a greater participation of these funds promotes further reduction in a potential underpricing (H2) was not confirmed. Research limitations/implications One can highlight the small amount of IPOs during the sampling period due to the occurrence of international and national economic crises, as well as the difficulty in obtaining information on the participation of VC/PE funds in the companies’ capital structure. Practical implications It was observed that information asymmetry had a mitigating effect from the presence of these funds in the companies, which can improve the pricing of their shares, decrease the costs and make volume captions viable for investments, in addition to giving credibility to the market information effectiveness. Originality/value This study differs from others in that it assesses not only the influence of VC/PE funds on the reduction of the underpricing of IPO shares, but also the participation of these funds in the capital of these companies.

Rivate Equity: Kauf und Verkauf auf dem Krankenhausmarkt

2019 ◽  
Vol 24 (03) ◽  
pp. 8-9
Author(s):  
Christoph Scheuplein
Keyword(s):  
Private Equity

Private Equity-Gesellschaften haben sich in den vergangenen Jahren stark auf dem deutschen Gesundheitsmarkt engagiert. So wurde der Gesundheitssektor im Jahr 2017 erstmals in Deutschland zum wichtigsten Anlagefeld für Beteiligungsgesellschaften. Dies umfasst auch Engagements auf dem Klinikmarkt.

Analysis of Factors Affecting Capital Structure in Food and Beverage Manufacturing Company

2018 ◽  
Vol 1 (2) ◽  
pp. 1-14
Author(s):  
Nur Hajja Aini ◽  
St Habibah
Keyword(s):  
Capital Structure ◽  
Firm Size ◽  
Significant Influence ◽  
Fixed Effects ◽  
Random Effect Model ◽  
Manufacturing Companies ◽  
Business Risk ◽  
Growth Opportunities ◽  
Food And Beverage ◽  
The Capital Structure

The purpose of this research to analyze the influence of firm size, liquidity, growth opportunities, tangibility asset, and business risk to the capital structure of listed food and beverage manufacturing companies in Indonesia and Vietnam Stock Exchange from 2010 to 2016. The result shows that the fixed effects model should be appropriate for this study as compared to the random effect model. Capital structure significantly differences between the two countries. Firm size has a positive but insignificant influence on the capital structure in Indonesia, whereas it has a positive and a significant influence on the capital structure in Vietnam. Liquidity has a negative and significant influence on the capital structure both in Indonesia and Vietnam. Growth opportunities have a negative but insignificant influence on the capital structure both in Indonesia and Vietnam. Asset tangibility has a positive but insignificant influence on the capital structure in Indonesia, but it has the negative but insignificant influence on the capital structure in Vietnam. Ultimately, the business risk has a negative and significant influence on the capital structure in Indonesia but has a positive and insignificant influence on the capital structure in Vietnam.

Entscheidungen in Leitsätzen

2018 ◽  
Vol 30 (1) ◽  
pp. 81-83
Keyword(s):  
Private Equity

Zusammenfassung Bundesgerichtshof Kein Anspruch auf Austausch von vereinbarter Sicherungshypothek gegen selbstschuldnerische Bankbürgschaft wegen beabsichtigter Veräußerung von Miteigentumsanteilen Vermittlung von Portfolioverwaltungsverträgen keine Anlagevermittlung Zu den Anforderungen des Deutlichkeitsgebots an eine Widerrufsbelehrung Keine Anwendung des § 218 BGB auf das Recht zum Widerruf eines Verbraucherdarlehensvertrags Keine Angabe der genauen Höhe der Kosten bei den Zielfonds im Prospekt eines Private-Equity-Dachfonds Zur Wirksamkeit einer formularmäßigen Bestimmung einer laufzeitunabhängigen „Kostenbeteiligung“ in Darlehensvertrag mit unter Marktpreisniveau liegendem Zins Barabhebung an Geldautomat als maßgeblicher Zeitpunkt für Verfügung von P-Konto Aufklärungspflicht von Anlagevermittler und -berater über Vertriebsprovisionen von über 15 % des einzubringenden Kapitals unter Einbeziehung des Agios Zu Verfügungen des Vollstreckungsschuldners über sein P-Konto Keine Erhebung von Einreden aus Sicherungsvertrag durch Erwerber eines mit einem Grundpfandrecht belasteten Grundstücks ohne an ihn übertragene Rückgewähransprüche Zur Unwiderruflichkeit des Widerrufs einer auf Abschluss eines Verbraucherdarlehensvertrags gerichteten Willenserklärung nach dessen Zugang Zur Auskunfts- und Rechenschaftspflicht eines Mittelverwendungskontrolleurs gegenüber Anlegern eines geschlossenen Filmfonds Zur Berufung des Bürgen auf Leistungsverweigerungsrecht des Hauptschuldners aus einem zwischen diesem und dem Gläubiger geschlossenen Stillhalteabkommen Zur Deutlichkeit einer bei Verbraucherdarlehensverträgen grundsätzlich entbehrlichen Belehrung über die Widerrufsfolgen Oberlandesgerichte Ankauf „gebrauchter“ Lebensversicherungsverträge kein Bankgeschäft i. S. d. KWG Landgerichte Zur Verjährung bereicherungsrechtlicher Rückforderungsansprüche bei zu Unrecht von der Bausparkasse einbehaltenen Darlehensgebühren Unwirksamkeit einer Klausel zur außerordentlichen Kündigung eines Darlehens allein aufgrund (drohender) Vermögensverschlechterung

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