Brazos Partners People: • Bowers and Clayton – they seem to have built a strong business‚ and are not selling because they think that there is something wrong with the business or it has topped out. I believe that because Bowers is staying on to handle marketing and sales‚ the transition should be relatively smooth • Brazos Partners – these three men bring a unique set of skills to the table. The private equity experience from Fronterhouse and McGee seems pretty standard with running a fund like
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1. What is Brazos’ investment strategy? Does it seem well suited for its position as a first-time fund? How do you assess the merits of the GTT transaction? Brazos’ investment strategy emphasizes buyouts of mid-size companies that show predictable cash flows‚ have good management teams in place‚ have well-developed niche markets‚ and are located in Texas and the Southwest. This strategy suits its position as a first-time fund because this geographic area is underserved by LBO firms. Additionally
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‚ will pay $69.25 for each TXU share‚ 15 percent more than the closing stock price on Feb. 23. TXU has only $11 billion of debt with the new $36 Billion debt‚ $22.5 billion of which matures by 2014 the rest $13.5 to mature in 2034. TXU energy post LBO has been renamed as Energy Future Holdings Inc.‚ with the acquisition using a combination of high-yield‚ high-risk loans and bonds. As part of the buyout‚ the electric distribution part of the company will be called Oncor Electric Delivery‚ the electric
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subjected to whatever the market deemed the appropriate price for the stock was. Therefore‚ from their perspective‚ they had to juggle potential LBO offers with their prediction of what the company would have commanded in the marketplace. Hertz was a prime buyout target for a LBO because the company meets many of the classic criteria for a successful LBO target. It has an extremely strong brand name which consumer markets all over the world have come to know. It was actually listed among Business
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Hertz A: 1. CD&R pursued Hertz for three years only to find itself facing an auction and a complicated deal. Is it worth it? • It is worth it. Because hertz is a mature company with predictable cash flows. Such acquisition provides a great opportunity to generate decent return on equity to sponsors • CD&R had access to available debt avenues to make the company grow • CD&R was able to make operating changes and improve the companies efficiency 2. What are the
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Viet Duong Sybil Cheng 11/17/2011 Holmes Corp: LBO Valuation 1. Sustainability – One of Holmes Corp. major strengths is its long history of steady and predictable cash flow. Over the last five years‚ Holmes’ Net sales have grown from $41MM to $103MM which is approximately a growth rate of 151%. Over the same time frame Holmes’ net earnings have grown from $1M to $6.6M which is approximately a growth rate of 560%. This history of strong earnings means we can realistically expect stable
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selling stock to the public. The company has realized hundreds of millions of dollars in improved financial results annually‚ but also has cut thousands of jobs as it has sought to make operations more efficient. Figure 7 provides an overview of the LBO transaction‚ including a time line of key events. Background: Hertz says it is the world’s largest general use car rental company‚ with approximately 8‚100 locations in about 145 countries. Hertz also operates an equipment rental company with about
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Introduction The vice presidents of Brazos Manufacturing‚ Inc. had needed to cut down on their budgets. The company was a $550 million automotive parts supply company. Troy Sozuko had been with BMI for the past 30 years and was the highest-ranking officer in North America. Jack was the controller of the multi-million-dollar company. Then one day Troy came to Jack and asked him to change his W-2 form intentionally to show that he used his car for personal use. Jack understood that this was a really
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Del Monte Foods Company LBO Deal Report 1. Del Monte Foods Company (DLM or ‘the company’) is one of US ’s largest producers‚ distributors and marketers of premium quality‚ branded pet products and food products for the retail market. It is the world’s sixth largest manufacturer of preserved food‚ and the leading producer of both preserved fruit and preserved tomatoes . Its pet products segment includes brands like Meow Mix‚ Kibbles n Bits‚ Milk-Bone‚ 9Lives‚ Pup-Peroni‚ Gravy Train‚ Nature
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approximately $255M per year. Conservatively‚ we would expect that CD&R would realize 50% of its projections‚ which amounts to approximately $127M per year. 2. How would you explain the proposed transaction structure developed by CD&R and its partners? Specifically‚ does it help or hinder the realization of the anticipated
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