The University of Chicago

Booth School of Business

Chicago, USA

Course Private Equity & Entrepreneurial Finance Prof. Andreas T. Angelopoulos

The LBO Structure & Finance

Course Language: English

E-mail: aangelop@chicagobooth.edu
Meeting Hours: By Appointment
E-mail: andreas@imperial.ac.uk

Location: Gleacher Center

Booth School of Business

The University of Chicago

Private Equity & Entrepreneurial Finance – The LBO Structure & Finance
The purpose of this course is to provide a strong theoretical framework, practical applications and
tools to business school students interested in private equity finance, and especially in the specific
type of private equity finance the LBO finance. Through this course the students will learn about
the LBO market and new trends, the finance instruments and structures, the applications of these
tools in companies’ acquisitions, the role of the banks or the private equity or mezzanine funds in
the debt raising process, the financial & legal structuring and the valuation process executing an
investment.

Topics covered include fundamental analysis, applications and models related to the work of
private equity professionals, bankers and entrepreneurs involved in the transaction and the
challenges that they will face during the investment process and their negotiations. This course is
designed to provide understanding of:

• The private equity finance

• The investors and the LBO finance - as a type of private equity finance
• Where banks fit in the process - The banks’ role
• The impact on investor’s returns by applying leverage
• The acquisition finance (LBO) instruments:
- Debt: The Senior Debt, Sub Debt, Mezzanine, PIK, High Yield Bonds, Securitisation
- Quasi-Equity/Equity: Preference Shares, Convertible bonds, Shareholder Loans,
Ordinary Shares
• The business plan & financial model analysis
• The LBO financial & legal structuring (equity, quasi-equity and debt)
• The LBO valuation & modeling
• The LBO cases analysis: presenting various LBO structures and models
• Developments & trends in LBO financing

Course Aims
The purpose of this course is to provide the required strong technical skills to the business school
students interested to work as entrepreneurs (MBI or MBO teams) raising capital from private
equity funds, entrepreneurs acquiring other companies, company managers involved in the

(c) 2009, Andreas Theophanes Angelopoulos 1

acquisition & business development strategy, investment bankers, corporate lawyers, private
equity fund managers, auditors, and management consultants;

After this course the student will have the basic skills to structure a private equity (LBO) investment
from a financial and legal prospective, to present and monitor it through the development of
various tools and models.

Course structure
The course will be 3 hours per day: 14:00 – 17:00 from September 7 – 12, 2009.

In addition, Thursday & Friday, 17:00 – 19:00, 10th & 11th of May 2009, 2 Cases in LBO
strcturing & modeling will be presented together with Tiago Dias, Mergers & Acquisitions,
Rothschild & C, London, UK.

Suggested courses to have attended before this course

Financial Accounting, Corporate Finance, Valuation, Debt Finance, Business Plan Analysis,
Financial Statements Analysis, Strategy, Marketing, Private Equity & Entrepreneurial Finance,
Venture Capital Finance.

Guest Speakers Program

Thursday, 10 September 2009: 13:00 – 13:50
Presentation by BlackRock Private Equity Partners
Stephen J. Kelly, Managing Director, BlackRock Private Equity Partners
Stephen Kelly joined BlackRock Private Equity Partners at its formation in 1999, and has helped
build the business into a $6.2 billion, global private equity investment program with offices in
Princeton, London, Durham, NC, and Boston. Since that time, Stephen has led the team's
investments in a number of private equity funds and direct investments with a focus on venture
capital, technology, and growth opportunities. Stephen is a member of the team's Management
Committee, Investment Committee, and Operating Committee and has served on or as an
observer to the boards of multiple private equity funds and several private companies. Prior to
joining BlackRock, Stephen spent ten years as a management and technology consultant with
Booz Allen & Hamilton, where he led numerous information technology strategy, design, and
implementation initiatives for Fortune 500 clients and major agencies of the federal government.
Stephen holds an MBA from the Amos Tuck School of Business at Dartmouth College, an MS in
Engineering from the University of Maryland, and a BS in Engineering from the University of
Dayton.
BlackRock
BlackRock is a premier provider of global investment management, risk management, and
advisory services managing more than US$1.28 trillion across equity, fixed income, real estate,
liquidity, and alternative strategies. BlackRock Solutions provides risk management and enterprise
investment services for US$7 trillion in assets. Headquartered in New York, the firm maintains
offices in 21 countries around the world.
BlackRock Private Equity Partners
Founded in 1999, BlackRock Private Equity Partners ("BlackRock PEP") specializes in managing
diversified private equity portfolios inclusive of primary, secondary and direct co-investments.
Currently, BlackRock PEP's infrastructure and investment highlights include:
• A dedicated team of 52 professionals including 23 investment professionals
• Locations in New York; Princeton, New Jersey; Durham, North Carolina; and London

(c) 2009, Andreas Theophanes Angelopoulos 2

 • Investment commitments in venture capital, growth capital, leveraged buyout, mezzanine
financing and distressed private equity transactions and funds
• Assets under management: $6.5 billion as of March 31, 2009

Thursday, 10 September 2009: 17:00 – 19:00 & Friday, 11 September 2009: 17:00 – 19:00
Case presentations by Rothschild’s M & A, London UK
Tiago Dias, Rothschild, London UK
Tiago is currently working in the M&A Healthcare team of Rothschild in London. Previously he
worked in Leveraged Finance (Media and Telecom) team of Société Générale in London starting
his career as a Telecoms Engineer at NetPlan in Lisbon. He received his MSc in Finance at
Imperial College London and a MSc in Electrical and Computer Engineering (specialized in
Telecoms) at Instituto Superior Técnico in Lisbon.
Rothschild
Rothschild has provided Investment Banking, Corporate Banking and Private Banking &
Trust services to governments, corporations and individuals worldwide for over 200 years. It is
organised through 49 offices in 34 countries, from the Americas through Europe to Australia. It
ranks amongst the world's largest privately-owned advisory banks.

Suggested textbooks in Private Equity Finance

• Valuation, Leveraged Buyouts, and Mergers and Acquisitions, by J. Rosenbaum & J. Pearl
• Private equity & Venture Capital Casebook, by J. Lerner
• Venture Capital & the Finance of Innovation, by A. Metrick

Acknowledgements
I would like to thank the following Imperial College students, collegues and friends for their time
and patience reviewing, discussing, and exchanging information, during the preparation of this
course:
o Ioannis Vergados, Director, Leverage Finance, Dresdner Bank, London UK
o Stephane Callas, Director, Infrastructure Finance, Dresdner Bank, London UK
o Stephano Beschi, Director, M & A, Rothschild, London UK
o Dimitrios Iroidis, Manager, M & A, Rothschild, London UK
o Tiago Dias, Analyst, Rothschild, London UK (Imperial College 08)
o Luís M. Duarte, Director, Bridgepoint Capital, London UK
o Douglas Porter, Analyst, Blackrock Private Equity, London UK (Imperial College 08)
o Benoit Tanguy, Managing Director, Société Générale Bank, Paris France
o Edmund Lazarus, Founder & Partner, Englefield Capital, London UK
o Philippe Costeletos, Co Head Europe & Partner, TPG, London UK

Their real world contribution was unique to prepare this course which provides a strong finance
theory combining it with practical applications & models in an academic area where there is a lack
of comprehensive written reference material, bridging the theoretical with the practical approach.

(c) 2009, Andreas Theophanes Angelopoulos 3

Course Outline

Section A - Introduction to Private Equity Finance

• Introduction to private equity finance

• Private Equity & Venture Capital Finance
• Alternative Investments – Private Equity investments
• The stage & type of financing
• Private equity funds structure & operation
• Investors in private equity funds – Type of private equity funds
• Would my company be attractive to a private equity investor? and what type of fund?
• Selecting a private equity fund
• Stage/Type of private equity finance - Industry – Investment amount - Geography
• Private equity financing – bank debt financing: the difference in the philosophy of the two
type of financings, for the company
• The investment & due diligence process, the monitoring & business development and the
potential exit
• Investment and fund raising trends (World, N. America, Europe, Asia, 1998 – 2007)

Readings:
1) Venture Capital and Private Equity as an Asset Class for Institutional Investors, London
Business School report in UK, by BVCA (digital)
2) Private Equity & Venture Capital in European Economy, by BVCA (digital)
3) Why and How to Invest in Private Equity, by EVCA (digital)
4) A Guide ot Private equity, by BVCA and PWC (digital)
5) A note on due diligence process, by Prof. Andreas T. Angelopoulos (digital)
6) The Private Equity Glossary by EVCA (digital)

Section B – The LBO Finance, as a type of Private Equity Finance

• What is a Leverage Buy Out? In which cases a PE investment is structured as an LBO?

• The history of the LBO finance
• M & A, Private Equity and LBO finance market and trends 2003 - 2009
• Types of LBO financing
• LBO characteristics and requirements
• Typical LBO structures
• Financial sponsors’ value extraction process
• What do they do the banks; a typical transaction
• The importance of the M & A advisor coordinating the auction - the IM
• Where leverage finance banks fit into the process
• Leverage finance products offered by the Investment banks
• The importance of the Bookrunner in the syndication process in an LBO process – the IM
• The importance of the bank’s syndication in an LBO process
• Syndicated loans
• The Acquisition finance (LBO) instruments:

(c) 2009, Andreas Theophanes Angelopoulos 4

 Debt:
o Senior
o Sub/Junior Debt
o Mezzanine
o PIK
o High Yield Bonds
o Capex & RCF
Quasi-Equity/Equity:
o Preference Shares
o Convertible Bonds
o Shareholder Loans products
o Ordinary Shares
• The Revolving Credit Facility - (RCF)
• The Capital Expenditure Facility – (CAPEX)
• Bank debt vs Bond financing - strategic considerations
• Bank debt vs Bond financing – covenant considerations
• Forward start facilities
• The debt financing trends – economy, banks and its effect in debt pricing (2006-2009)
• How LBOs increase shareholder value?
• The impact on investor’s returns by applying leverage
• What can a company or a fund pay for an acquisition?
• Asset based LBO financing – OpCo/PropCo structures
• Extending the debt financing more than 10 years
o Securitisation
o Sale & Lease back
o Infrastructure
• Refinancing risk
• Advantages & Risks of Leverage

Readings:
1) Mezzanine & High Yield Finance, by Prof. Andreas T. Angelopoulos (25 slides, print)
2) Securitisation & WBS finance, by Prof. Andreas T. Angelopoulos (27 slides, print)
3) The role of the M & A advisor in a buyout auction – the case of the healthcare sector and
development of the IM, by Prof. Andreas T. Angelopoulos, S. Beschi & D. Iroidis,
Rothschild (32 slides, print)
4) Debt financing structures, by EVCA (digital)

Section C - LBO Finance structuring & valuation

• The business plan (IM) & financial plan analysis

• The sources and uses of funds – the typical split
• The case of subordination (contractual/strctural)
• The financial plan analysis - the operating items & forecast
• The financial plan analysis – the cash flow items
• The credit statistics

(c) 2009, Andreas Theophanes Angelopoulos 5

 • The Capital structure optimisation - debt structuring & sizing
• The structuring/tranching of debt
• The impact in IRR
• The Quasi-equity & equity financing
• The IRR scenarios & sensitivities
• The final structure & the covenants negotiation
• The risk of LBO structures to go wrong
• The financial & legal structuring mitigating the risks:
o equity
o quasi-equity
o debt
• Structuring the relationship with the management:
o Employment Agreement
o Management Share Incentive Plan (MSIP)
o Shares Purchase Plan
o Shareholder Agreement

Readings:
1) A Note on debt finance structuring, by Prof. Andreas T. Angelopoulos, I. Vergados,
Dresdner Bank and T. Dias, Rothschild (50 pages, print)
2) A Note in private equity structuring, by Prof. Andreas T. Angelopoulos (8 pages, print)
3) A Guide to Private Equity term sheets, by BVCA (56 pages, print)
4) Private equity financial structuring, by Andreas T. Angelopoulos (28 pages, print)
5) Private legal structuring, by Prof. Andreas T. Angelopoulos (26 slides, print)
6) Private equity valuation, by Prof. Andreas T. Angelopoulos (30 pages, digital)
7) A Note on business plan analysis before a private equity investment, by Prof. Andreas T.
Angelopoulos, D. di Luccia, VVA Consulting (50 pages, will be distributed in the class)
8) A Note on financial statements analysis before a private equity investment, by Prof.
Andreas T. Angelopoulos (50 pages, will be distributed in the class)
9) A Note on private equity valuation methods & modeling, by Prof. Andreas T. Angelopoulos
(30 pages, will be distributed in the class)

Section D – LBO Finance methodology & modeling (A Practical look)

• The LBO modeling methodology – various approaches (private equity fund or lending
bank?)
• LBO modeling - the 7 steps
• Calculate the sources & uses of funds
• Review and define the operating assumptions
• Calculate the debt strcture & schedule
• Calculate the projected Income Statement
• Calculate the FCF and the cash balance
• Calculte the credit statistics
• Calculate the IRR & Sensitivity analysis
• LBO modeling - remarks

(c) 2009, Andreas Theophanes Angelopoulos 6

Readings (Notes and HBS cases print, all excel models digital):
1) A Note on LBO structuring & modeling (A), by Prof. Andreas T. Angelopoulos and Tiago
Dias, Rothschild (10 pages, print – 2 LBO models, digital)
2) A Note on LBO structuring & modeling (B) - Advanced, by Prof. Andreas T. Angelopoulos
and Tiago Dias, Rothschild & C ( 22 pages, print – 1 LBO models, digital)
3) The LBO valuation modeling process, by S. Beschi & D. Iroidis, Rothschild (1 LBO model,
digital)
4) A private equity valuation case: A note on valuation in private equity settings by Prof. J.
Lerner (HBS case)
5) A technical note on LBO valuation (A) : The LBO and the target IRR method by Prof. C.
Baldwin (HBS case)
6) A technical note on LBO valuation (B) : The equity cash flow method of valuation using
CAPM by Prof. C. Baldwin (HBS case)

Section E – The Leverage Finance & Markets 1999 – 2009 ; The shift of investors in
infrastructure finance, a new asset class?

• The leverage finance market overview 1999 – 2007

• Short term impact ? benchmaking for new generation transactions coming? year 2007
• How secondary loan market is behaving?
• Market correction unfolded in several phases 2007 – 2008
• The European leveraged loan market movement in 2008 towards 2009
• The credit crisis has affect the markets and the financing reducing depth across investor
groups - Overview of the loan financing market 2008 - today
• Large degree of connectivity between markets and regions burdens the primary loan
market
• Market expectations for 2009 – New generation LBOs or debt restructuring or Infrastructure
Finance period?
• Developments in LBO financing – structure parameters: pre correction vs actual
• Overview of recently launched transactions
• Leverage loan look forward 2009
• Challenging economic conditions, 2007, 2008 and 2009
• The shift of investors in infrastructure financing – a new asset class?
• The difference from the other investment assets - the investment criteria
• A new asset class
• Characteristics of infrastructure assets
• A broad area of investment possibility
• Market trends in Infrastructure investment in Europe
• Market trends in Infrastructure investment in USA
• Drivers shaping the infrastructure market in Europe & USA
• The infrastrcture investors
• The evolution of Yield investors
• Infrastructure transactions in Europe – Overview by Dresdner Bank
• Structuring an infrastructure finance – key considerations
• Infrastructure Finance typical deal structure – overview of main terms
• The current situation raising & structuring debt financing for acquisitions
• Structuring & modeling debt financing for infrastructure investments
(c) 2009, Andreas Theophanes Angelopoulos 7
 • Characteristics of infrastructure transactions - an LBO philosophy adjusting in asset’s risk
& return?
• What is the difference structuring an LBO or Infrastructure or project finance
• Consequential differences LBO finance and Infrastructure finance
• Consequential differences Project finance and Infrastructure finance
• Infrastructure acquisitions transactions – debt finance structures (2007, 2008, 2009)
• Investing in infrastructure – assessing the risks from debt and equity prospective
• Main challenges going forward
• Challenges going forward in the M & A and financing markets
• Representative real transaction structures in : telco, water, transport, utilities, and gas in
Europe by S. Callas, Direcor, Infrastructure Finance, Dresdner Bank, London, UK

Readings (excel model digital):

• The Infrastructure structuring & modeling by S. Callas, Director, Infrastructure Finance,
Dresdner bank, London UK (1 Infrastructure Finance model, digital)

Section F – LBO & Infrastructure Structure & Finance (Cases)

Cases Analysis - presenting 3 LBO and 1 infrastructure investment structures and models (all
excel models – digital):

o Case study (1): A Note on the private equity acquisition process; The case of a private
equity investment in the retail sector in UK
by Prof. Andreas T. Angelopoulos, Luís M. Duarte, Director L. M Bridgepoint Capital,
London & Tiago Dias, Rothschild & Co, London (30 slides, print – LBO model, digital)

o Case study (2) & (3): Understanding the differences between Infrastructure and LBO
investments structuring & modeling; The KKR LBO finance acquisition of a chemical
company, Iridium GmbH in Germany & the Macquarie Infrastructure Finance acquisition
of an airport, Delphi SA in France,
by Prof. Andreas T. Angelopoulos and I. Vergados, Director Leverage & Infrastructure
Finance, Dresdner Bank, London (9 slides, print – LBO & Infrastructure model, digital)

o Case study (4): The affect of credit in debt financing and in the LBO investments; the
case of the buyout of Starbucks,
by Prof. Andreas T. Angelopoulos & Tiago Dias, Rothschild & Co, London (30 slides,
will be distributed in the class – 2 LBO models, digital)

(c) 2009, Andreas Theophanes Angelopoulos 8

Course pack

Packet A (print)
1. Lecture Introduction/Syllabus, by Professor Andreas T. Angelopoulos 2009, Rightsholder
Angelopoulos, Andreas T, 2009 (16 pages)

2. Lecture Notes, by Professor Andreas T. Angelopoulos 2009, Rightsholder Angelopoulos,

Andreas T, 2009 (227 slides)
Section A – Introduction to Private Equity Finance, 24 slides
Introduction to private equity finance, Private equity & venture capital finance, Alternative
investments – Private equity investments, The stage & type of financing, Private equity funds
structure & operation, Investors in private equity funds – Type of private equity funds, Would my
company be attractive to a private equity investor? and what type of fund?, Selecting a private
equity fund, Stage/Type of private equity finance - Industry – Investment amount – Geography,
Private equity financing – bank debt financing: the difference in the philosophy of the two type of
financings, for the company, The investment & due diligence process, the monitoring & business
development and the potential exit, Investment and fund raising trends (World, N. America,
Europe, Asia, 1998 – 2007)
Section B - The LBO Finance, as a type of Private Equity Finance, 37 slides
What is a Leverage Buy Out?, In which cases a PE investment is structured as an LBO?, The
history of LBO finance, M & A, Private Equity and LBO finance market and trends, Types of LBO
financing, LBO characteristics and requirements, LBO structures, Financial sponsors’ value
extraction process, Where banks fit in the process, the investment banks’ role, The importance of
the M & A advisor coordinate the auction - the IM, Where leverage finance banks fit into the
process, Leverage finance products offered by the Investment banks, The importance of the
Bookrunner in the syndication process in an LBO process – the IM, The importance of the bank’s
syndication in an LBO process, Syndicated loans, The Acquisition finance (LBO) instruments: Debt
(Senior, Sub/Junior Debt, Mezzanine, PIK, High Yield Bonds, Capex & RCF), Quasi-Equity/Equity
(Preference Shares, Convertible Bonds, Shareholder Loans products, Ordinary Shares), The
Revolving Credit Facility - (RCF), The Capital Expenditure Facility – (CAPEX), Bank debt vs Bond
financing - strategic considerations, Bank debt vs Bond financing – covenant considerations,
Forward start facilities, Recent debt pricing trends 2006 - 2009, How LBOs increase shareholder
value?, The impact on investor’s returns by applying leverage, What can a company or a fund pay
for an acquisition, Asset based LBO financing – OpCo/PropCo structures, Extending the debt
financing more than 10 years (Securitisation, Sale & Lease back, Infrastructure), Refinancing risk,
Advantages & Risks of Leverage.
Section C - LBO Finance structuring & valuation, 36 slides
The business plan (IM) & financial model analysis, The sources and uses of funds – the typical
split, The case of subordination (contractual/strctural), The financial plan analysis - the operating
items & forecast, The financial plan analysis – the cash flow items, The credit statistics, The
Capital structure optimisation - debt structuring & sizing, The structuring/tranching of debt, The
impact in IRR, The Quasi-equity & equity financing, The IRR scenarios & sensitivities, The final
structure & the covenants negotiation, The risk of LBO structures to go wrong, The financial & legal
structuring mitigating the risks: equity, quasi-equity, debt, Structuring the relationship with the
management: Employment Agreement, Management Share Incentive Plan (MSIP), Shares
Purchase Plan, Shareholder Agreement
Section D - The LBO modeling methodology, 10 slides
The LBO modeling methodology – various approaches (private equity fund or lending bank?), LBO
modeling - the 7 steps, Calculate the sources & uses of funds, Review and define the operating
assumptions, Calculate the debt strcture & schedule , Calculate the projected Income Statement,
Calculate the FCF and the cash balance, Calculte the credit statistics, Calculate the IRR &
Sensitivity analysis, LBO modeling - remarks

(c) 2009, Andreas Theophanes Angelopoulos 9

Section E – The Leverage Finance & Markets 1999 – 2009 ; The shift of investors in
infrastructure finance, a new asset class?, 51 slides
The leverage finance market overview 1999 – 2007 , Short term impact ? benchmaking for new
generation transactions coming? year 2007, How secondary loan market is behaving?, Market
correction unfolded in several phases 2007 – 2008, The European leveraged loan market
movement in 2008 towards 2009, The credit crisis has affect the markets and the financing
reducing depth across investor groups - Overview of the loan financing market 2008 - today ,
Large degree of connectivity between markets and regions burdens the primary loan market,
Market expectations for 2009 – New generation LBOs or debt restructuring or Infrastructure
Finance period?, Developments in LBO financing – structure parameters: pre correction vs actual ,
Overview of recently launched transactions, Leverage loan look forward 2009, Challenging
economic conditions, 2007, 2008 and 2009, The shift of investors in infrastructure financing – a
new asset class?, The difference from the other investment assets - the investment criteria, A new
asset class, Characteristics of infrastructure assets, A broad area of investment possibility, Market
trends in Infrastructure investment in Europe , Market trends in Infrastructure investment in USA,
Drivers shaping the infrastructure market in Europe & USA, The infrastrcture investors, The
evolution of Yield investors, Infrastructure transactions in Europe – Overview by Dresdner Bank,
Structuring an infrastructure finance – key considerations, Infrastructure Finance typical deal
structure – overview of main terms, The current situation raising & structuring debt financing for
acquisitions, Structuring & modeling debt financing for infrastructure investments, Characteristics
of infrastructure transactions - an LBO philosophy adjusting in asset’s risk & return?, What is the
difference structuring an LBO or Infrastructure or project finance, Consequential differences LBO
finance and Infrastructure finance, Consequential differences Project finance and Infrastructure
finance, Infrastructure acquisitions transactions – debt finance structures (2007, 2008, 2009),
Investing in infrastructure – assessing the risks from debt and equity prospective, Main challenges
going forward, Challenges going forward in the M & A and financing markets, Representative real
transaction structures in : telco, water, transport, utilities, and gas in Europe by S. Callas, Direcor,
Infrastrcture Finance, Dresdner Bank, London, UK
Section F – LBO & Infrastructure Structure & Finance (Cases), 69 slides
Presenting various LBO cases, structures and models; Case study (1): A Note on the private
equity acquisition process; The case of a private equity investment in the retail sector in UK by
Prof. Andreas T. Angelopoulos, Luís M. Duarte, Director L. M Bridgepoint Capital, London & Tiago
Dias, Rothschild & Co, London (30 slides, print – LBO model, digital) - Case study (2) & (3):
Understanding the differences between modeling Infrastructure and LBO investments; The KKR
LBO finance acquisition of a chemical company, Iridium GmbH in Germany & the Macquarie
Infrastructure Finance acquisition of an airport, Delphi SA in France, by Prof. Andreas T.
Angelopoulos and I. Vergados, Director Leverage & Infrastructure Finance, Dresdner Bank,
London (9 slides, print – LBO & Infrastructure model, digital) - Case study (4): The affect of credit
crunch in debt markets and LBO investments; the case of the buyout of Starbucks, by Prof.
Andreas T. Angelopoulos & Tiago Dias, Rothschild & Co, London (30 slides, will be distributed in
the class – 2 LBO models, digital)

(c) 2009, Andreas Theophanes Angelopoulos 10

Packet B (print)

Section A – Readings

(All digital)

Section B - Readings:

1) Mezzanine & High Yield Finance, by Prof. Andreas T. Angelopoulos, Rightsholder

Angelopoulos, Andreas T 2006 (25 pages)
2) Securitisation & WBS finance, by Prof. Andreas T. Angelopoulos, Rightsholder
Angelopoulos, Andreas T, 2006 (27 pages)
3) The role of the M & A advisor in a buyout auction – the case of the healthcare sector and
the development of the IM, by Prof. Andreas T. Angelopoulos, S. Beschi & D. Ioroidis,
Rothschild & C, Rightsholder Angelopoulos, Andreas T, 2009 (32 pages)

Section C - Readings:

1) A Note on debt finance structuring, by Prof. Andreas T. Angelopoulos, I. Vergados,

Dresdner Bank and T. Dias, Rothschild & C, Rightsholder Angelopoulos, Andreas T, 2009
(50 pages)
2) A Note in private equity structuring by Prof. Andreas T. Angelopoulos, Rightsholder
Angelopoulos, Andreas T, 2001 (9 pages)
3) A Guide to Private Equity term sheets, by BVCA, Rightsholder BVCA 2009 (37 pages)
4) Private equity financial structuring, by Prof. Andreas T. Angelopoulos, Rightsholder
Angelopoulos, Andreas T, 2005 (28 pages)
5) Private legal structuring, by Prof. Andreas T. Angelopoulos, Rightsholder Angelopoulos,
Andreas T, 2005 (26 pages)

Section D - Readings (excel models digital):

1) A Note on LBO structuring & modeling (A), by Prof. Andreas T. Angelopoulos and Tiago
Dias, Rothschild & C, Rightsholder Angelopoulos, Andreas T, 2009 (10 pages)
2) A Note on LBO structuring & modeling (B) - Advanced, by Prof. Andreas T. Angelopoulos
and Tiago Dias, Rothschild & C, Rightsholder Angelopoulos, Andreas T, 2009 (22 pages)
3) A private equity valuation case: A note on valuation in private equity settings by Prof. J.
Lerner (HBS case 9-297-050)
4) A technical note on LBO valuation (A) : The LBO and the target IRR method by Prof. C.
Baldwin (HBS case 9-902-004)
5) A technical note on LBO valuation (B) : The equity cash flow method of valuation using
CAPM by Prof. C. Baldwin (HBS case 9-902-005)

Section E – Readings

(excel model digital)

(c) 2009, Andreas Theophanes Angelopoulos 11

Packet C (digital, will be distributed in the class):

A. Readings

Section A - Readings:
1) Venture Capital and Private Equity as an Asset Class for Institutional Investors, London
Business School report in UK, by BVCA, Rightsholder BVCA
2) Private Equity & Venture Capital in European Economy, by BVCA, Rightsholder BVCA
3) Why and How to Invest in Private Equity, by EVCA, Rightsholder EVCA
4) A Guide ot Private equity, by BVCA and PWC, Rightsholder BVCA
5) A note on due diligence process, by Prof. Andreas T. Angelopoulos, Rightsholder
Angelopoulos A., 2008
6) The Private Equity Glossary by EVCA, Rightsholder EVCA

Section B – Readings
1) Debt financing structures, by EVCA, Rightsholder EVCA

Section C – Readings
1) A guide to Private Equity term sheets, by BVCA, Rightsholder BVCA
2) Private equity valuation, by Prof. Andreas T. Angelopoulos, Rightsholder Angelopoulos,
Andreas T, 2005

B. Legal & Financial models (including all excel models from Readings D, E and Section E -
cases)

a. Sample models (LBO and valuation) by Prof. Andreas T. Angelopoulos, Rightsholder

Angelopoulos, Andreas T, 2009
1) A note on LBO structuring & modeling (A), by Prof. Andreas T. Angelopoulos and Tiago
Dias, Rothschild & C (2 LBO models)
2) A note on LBO structuring & modeling (B) - Advanced, by Prof. Andreas T.
Angelopoulos and Tiago Dias, Rothschild & C (1 LBO model)
3) The LBO valuation modeling process, by S. Beschi & D. Iroidis, Rothschild & C (1 LBO
model)
4) The Infrastructure structuring & modeling by S. Callas, Director, Infrastructure Finance,
Dresdner bank, London UK (1 Infrastructure Finance model)
5) Case study (1): A Note on the private equity acquisition process; The case of a
private equity investment in the retail sector in UK by Prof. Andreas T. Angelopoulos,
Luís M. Duarte, Director L. M Bridgepoint Capital, London & Tiago Dias, Rothschild & Co,
London (LBO model, digital)
6) Case study (2) & (3): Understanding the differences between modeling Infrastructure
and LBO investments; The KKR LBO finance acquisition of a chemical company,
Iridium GmbH in Germany & the Macquarie Infrastructure Finance acquisition of an
airport, Delphi SA in France, by Prof. Andreas T. Angelopoulos and I. Vergados, Director
Leverage & Infrastructure Finance, Dresdner Bank, London (LBO & Infrastructure model,
digital)
7) Case study (4): The affect of credit crunch in debt markets and LBO investments; the
case of the buyout of Starbucks, by Prof. Andreas T. Angelopoulos & Tiago Dias,
Rothschild & Co, London (30 slides, will be distributed in the class – 2 LBO models, digital)

(c) 2009, Andreas Theophanes Angelopoulos 12

b. Sample private equity legal agreements by NVCA, BVCA and EVCA, RightsholderS EVCA,
BVCA, and NVCA

o Private equity legal agreements – AA

1) Standard NDA
1) Acquisition facility commitment letter
2) Acquisition facilties - Short Term Sheet

o Private equity legal agreements – BVCA

1) NDA
3) Confidentiality agreeement
4) Term sheet
5) Guide to Term Sheets
6) MoU 1 & 2
7) Articles of Association
8) Subscription and Shareholders Agreement
9) LP agreement

o Private equity legal agreements – NVCA

10) Term sheet

11) Certificate of incorporation
12) Investors rights agreement
13) Management rights letter
14) Indemnification agreement
15) Right of first refusal and co sale agreeemnt
16) Stock purchase agreement
17) Voting agreement

C. Research & special papers regarding private equity, venture capital and
entrepreneurship in Europe, USA, and UK published by EVCA, BVCA, NVCA, and PWC in UK,
USA and Europe, Rightsholder EVCA, BVCA, NVCA, PWC:

Private Equity in Europe

1) Issues that a private equity investor will face in UK, Italy, Spain, France, Germany,
Netherlands, Belgium, Sweden by Aschurtz Morris Crisp

2) Economic and Social Impact of Management Buyouts & Buyins in Europe

3) Economic Impact of Venture Capital in Europe

4) Private equity contribution in family businesses

5) Private Equity employment contribution in Europe

6) Fullfilling the promise of venture backed high potential companies in Europe; how we need
to fix the small companies in Europe

(c) 2009, Andreas Theophanes Angelopoulos 13

 7) Six key misconceptios regarding buyouts

8) The impact of private equity backed buyouts on employee relations

9) Private equity and generational change

10) European Buyout success stories

11) European tecnology & venture capital success stories

12) Central & Eastern Europe private equity investment statistics

13) European venture capital annual report

14) Mc Greevey interview and response to Charlie Mc Greevy’s recent comments on private
equity (2007)

15) European private equity & venture capital activity report

16) Learn from the past mistakes in Europe

17) Tax & legal environment favoring private equity in Europe

18) Bankruptcy insolvency in European countries

19) Director’s responsibilies in Europe

20) Employement law issues in Europe

21) Merger regulation in EU

22) Italian tax developments regarding buyouts

23) Developing Private Equity in Europe, report by European Commission

24) Funds of funds structures

25) Fund raising

26) Public to Private

27) Tax stock options

28) Tax dividend gains

29) Venture capital incentives in EU

Private Equity in UK

1) Private equity economic impact in UK

2) Private equity a UK success story

3) Business Angel Finance: Where companies find development capital and investors find
business opportunities, by National Business Angel Network in UK

4) Private Equity and Venture Capital, Performance Measurement Survey

(c) 2009, Andreas Theophanes Angelopoulos 14

 5) The London markets and private equity-backed IPOs Report prepared for British
Venture Capital Association and London Stock Exchange

6) The economic & social impact of private equity by Peter Linthwaite, by CEO of BVCA

7) Creating success from University spin out

8) Entrepreneur: Entrepreneurs’ cases that British venture capital funds backed up

Private Equity in USA

1) Global Trends in Venture Capital Survey

2) Venture Capital 5 Year performance numbers trend positive

3) Venture backed IPOs make gains; acquisition activity declines

4) Venture Capital fundraising activity continues at lower levels

5) Early Stage Funds Drive Fundraising

6) Better exits, results of a survey of the venture capital exit market and guidance on how
venture capitalists can improve exit performance

Private Equity in the World

1) Seeking differentiation at a time of change, Global Private Equity Report 2008, PWC

2) Global Private Equity Report 2005, PWC

3) venture Capital, Moneytree report, 2009, NVCA & PWC

(c) 2009, Andreas Theophanes Angelopoulos 15

Lecturer Profile - Andreas T. Angelopoulos
Adjunct A. Professor of Entrepreneurship at The University of Chicago Booth School of Business in Chicago, and
Visiting Lecturer of Private Equity, Venture Capital & Entrepreneurship at Imperial College Business School in
London
Professional experience
Andreas, 40 years old, has more than 16 years of experience in the areas of private equity and
engineering specialised in investments in the sectors of: education, healthcare, clean technologies,
infrastructure & real estate.
In the private equity area, he has advised Englefield Capital (€2 billion UK fund), Bridgepoint
Capital (€8 billion UK fund), and Summit Partners (€11 billion USA fund) having reviewed more
than 170 companies in the services sector (education, healthcare, energy, telecom, environment,
financial, outsourcing and business) and in retail, consumer goods, building materials in South
East Europe.
In the entrepreneuship side, he has advised various corporates (Metropolitan Hospital Group,
Cognita Schools, Humanitas Hospital Group, Techint Engineering Group, Bioiatriki Diagnostics,
Ionis Healthcare Services, Vivodi Telecom, Korres Natural Cosmetics, etc) in their business
development, new ventures strategy, operations, restructuring and capital raising.
Between 2000 – 2004, he was a member of Dresdner Kleinwort Benson’s (the investment bank of
Dresdner Bank, member of Allianz Group) Principal Finance Group in London, which commits the
bank’s own risk capital (€1 billion balance sheet) in taking secured equity and debt positions
(senior debt, mezzanine) at operating or financial assets as a ‘principal’. He reviewed and financed
various transactions on span of healthcare, leisure, hospitality, satellites, cable, mezzanine loans,
lease contracts and specialized industrials in West Europe. Representative transactions that he
reviewed are: Le Meridien hotel group, Center Parcs, Travelodge, Priory Healthcare, Fraikin, DT
cable disposal, Eutelsat. He involved in the financing of Goldman Sachs Capital Partners, GSC
and AIG – Mezz Vest Mezzanine Funds analyzing more than 21 companies in USA and Europe,
that these funds have invested.
Before that he worked in the venture capital division (€100million fund) of DrKB, based in London,
covering TMT in USA, Europe and Israel investing in 13 companies. He invested and served at the
Board of Directors of Inxight (USA) and Consul (Netherlands), as an observer.
In 1999, he started his career in the private equity working for Commercial Capital (€500 million
fund), member of Gredit Agricole Group, investing growth capital in mid-cap companies in South &
Eastern Europe.
Between 1993 and 1999, he worked in the area of engineering (infrastructure and real estate)
working with Bechtel, Dames & Moore and Hochtief – ABB J/V, in USA and Europe.
Academic experience
Andreas is lecturing Private Equity, Venture Capital and Entrepreneurship (as an Adjunct A.
Professor) at The University of Chicago Booth School of Business in Chicago, USA, at Imperial
College Business School in London, UK (as a Visiting Lecturer) and at Luiss Business School in
Rome, Italy (as an Adjunct Professor) from 2006.
Education
He holds an MBA from The University of Chicago Booth School of Business (sponsored by
Dresdner Bank AG), a MSc from Columbia University School of Engineering in New York City
(Gerondelis Scholar) and a graduate degree Diploma in Civil Engineering (Structural Engineering),
from the University of Patras School of Engineering, in Greece.
Other
Andreas is a member of the SEAS Advisory Committee for the development of a new Center and
Program in ‘Entrepreneurship & Engineering Innovation’ at Columbia University in New York City.

(c) 2009, Andreas Theophanes Angelopoulos 16