Case Yell Group - 4391 Words

Executive summary 2 PART 1: Valuation of the Yell Group 3 LBO Potential 3 Financial structure 3 Ownership structure 4 Potential cultural differences 4 Valuation 4 PART 2 : Readings 10 Bond prices and takeovers 10 Abnormal Bond Returns 10 Impact on bond returns of different legal standards in case of cross-border acquisitions 11 Sources of financing takeovers 11 References 14 Executive summary The Yell group is consists of BT Yellow Book Yellow Pages USA and several smaller UK based companies. In terms of being a god LBO candidate: * The Yell Group has a well-established position in a growing market generating stable revenue streams that are reasonably recession proof. * The market†¦show more content†¦and Yellow Pages USA being the market-leading independent publisher of yellow pages directories in the USA. The projected EBITDA for BT Yellow Pages in the U.K. and Yellow Pages USA combined should be more than enough to cover the proposed interest expense. This is an important factor in determining the possibility of an LBO. There is a good possibility for an exit strategy as business lines should be relatively easy to divest should the need arise, given that financial buyers are interested in business lines. All-in-all Yell Group has a well-established position in a growing market generating stable revenue streams that are reasonably recession proof, a well-established market position, good possibility for an exit, fulfilling at least two requirements for a good LBO candidate. Financial structure In order to finance the Yell Group buy out a consortium of APAX/Hicks Muse and investment banks had to structure a finance proposal. The two investment banks Merrill Lynch and CIBC World Markets agreed to raise 1.450 billion in debt. This debt consists of 950 million of syndicated senior term loans and 500 million through a bridge loan. This bridge loan where Yell Finance B.V. would be the beneficier had to be refinanced through a high yield offering on the UK and US markets. The 950 million is at different levels directly invested in the operating companies. APAX and Hicks Muse arranged forShow MoreRelatedYell Group Lbo Case2113 Words   |  9 PagesMemo for Valuing Cross-Border LBO of Yell Group Group 5: Li Xiao, Xia Liu, Minghao Gu, Shine Li Table of Contents 1. Purpose and Overview 2. Acquiring Yell Group Is a Good Choice for Apax and Hicks Muse 2.1 Directory Industry has enjoyed fast growth both in U.K. and U.S. 2.2 Yell Group is a good LBO candidate 2.3 Apax and Hicks Muse are experienced media investors 3. Valuation 3.1 Valuation Method 3.2 FCF of BT Yellow Pages 3.3 FCF of Yellow Book USA 3.4 Interest Tax Shield 3Read MoreCognitive Behavioral Intervention Approach1318 Words   |  6 Pagesself-reinforcement, self-control, and self-evaluation (Yell, Meadows, Drasgow, Shriner, 2009). 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