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LBO Model for DELL (Ticker: DELL

)
Circularity
FY ending on
Latest 10Q available as of

1
28-Feb-13
3-May-13

Enterprise Value Calculation
Acquisition date
Share price ($)
Premium paid
Acquisition share price($)
Basic shares outstanding (millions)
Dilutive Securities
Options
Options (mm)
24
35
17
27
17
Restricted Stock Units
RSUs outstanding (mm)

what is this for?

6-Sep-13
13.8
20%
16.6
1,756.1

Exercise Price ($) Dilutive effect
6.6
14.5
15.5
2.2
25.2
0.0
34.3
0.0
40.2
0.0
42

Diluted shares (mm)
Acquisition equity value
Exisiting Debt
Cash and cash equivalents
Acquisition Enterprise Value
EBITDA (LTM)
EBITDA multiple (LTM)

1,814.8
30,096.3
7,248.0
10,905.0
26,439.3
4,504.0
5.9 x

Assumptions
Exit year
Exit EBITDA multiple
Financing fees as a % to Debt raised
Advisory fees % of Enterprise Value
% of existing debt retired
Int exp. on Senior Debt
Int exp. on Sub. Debt

4.0
5.9 x
2.0%
1.5%
100.0%
5.0%
7.5%

how do we assume these?

Sources and Uses of Funds
Uses
Acquisition Equity Value
Debt Retired
Minimum Cash
Financing Fees
Advisory Fees
Total

Sources
Existing Cash
Senior debt
Sub. Debt
Total Debt
Sponsor Equity
Total

30,096.3
7,248.0
2,000.0
145.0
396.6
39,885.9
2012

2013

10,905.0
12,000.0
8,000.0
20,000.0
8,980.9
39,885.9

2014E

2015E

12,000.0
(1,031.1)
10,968.9
574.2

10,968.9
(1,572.5)
9,396.4
509.1

Debt Schedule
Senior Debt
Beginning Balance
Repayment
Ending Balance
Interest Expense
Subordinated debt

12,000.0

134.485.476.423.0) (748.000.382.579.8% (469.0 600. As % of Revenue Int.0 3.1) (600.774.0 8.1 3.9 (567.0 3.0 1.5) 2014E 2015E 3.8) 14.000.0 0.000.31% (191.0 (381.0) 20.0 -0.017.5 (509.5) 0.0 8.0) (26.071.522.6% 1.613.200.0 1.0) 2.407.Beginning Balance Repayment Ending Balance Interest Expense 8..973.1) (580.5 (1.841.0 0.0) (27.656.0 (191.000.0 (26.712.478.123.3) (1.4 (568.233.572.000.3% 8.0 (1.5 7.109. net EBT Tax rate Tax expense as a % of Revenue Tax expense Dividends paid Shares issuance/ (repurchases) Balance Sheet items Operating WC as a % of Revenues Accounts receivable Short-term financing receivables Inventories Other current assets Total Current Assets Accounts payable Other current liabilities Total Current Liabilities Op.0) (469.6) 9.8 (173.0 4.0 2012 2013 62.000.111.0) (8.158.0 1.000.0 3.9% 6.8) 2.191.621.0 1.416.exp.612.0 1.4 (173.961.183.2% (748.6) 2. Debt) Total Interest expense Tax expense (Inc)/ Dec in Operating Working Capital (Inc)/ Dec in other long term assets Inc/ (Dec) in other long term liabilities Less: Capex Less: Dividends paid Share issuances/(repurchases) FCF 4.8) (568.1% (675.213.734.090.031.0 (11.730.0 (741.200.425.30% (171.9 (18.5% 0.5) 0.031.8) 0.0) 56.0 0.0 0.0) (171.572.9% (513.0 2.448. (Sub.0 14.4 2.0 0.940.228.482.3) 0.0 0.0) 0.0) 930.1) 32.0 3.0 2.504.0 2014E 8.967.0 17.000.0) 30.0) (1.0 0.5) (567.630. (Senior Debt) Less: Int exp.0) 1.5 2.0 (418.0 2015E Income Statement items Revenues EBIT Int exp.2) (579.2) (1.1) 2.0 14.0 16.0) (19.0) 4.0 0.001.0 (4.0 14.0 (574.5 7.431.9% 12.0 0.404.6% 7.0 (11.0) (1. Working Capital Other long term assets as a % of Revenues Other long term assets Other long term liabilities as a % of Revenues Other long term liabilties Capex as % of revenues Capex Cashflow Statement EBITDA Less: Int exp.0) Repayment of Senior Debt Repayment of Subordinated debt Net cash flow Cash balance 2.0 2014E 1 2015E 2 .0) -42.806.0 (513.0 0.596.0 57.1) 0.0 2012 Returns to Equity holders 2013 0 57.0 11.0) 2012 2013 8.0 15.6% 17.0 3.0 -1.0) (7.5% 6.629.0) -48.0) (19.240.446.327.9) (26.

2% Sensitivity Analysis Exit Multiple EV/EBITDA Entry EBITDA multiple Stock Price ($) Premium 9% 4.980.278.0 Cash 10.469.8 Premium to current 8.0 17.5 Total debt (raised) 20.Enterprise Value on exit Senior Debt on exit Subordinated Debt on exit Total debt on exit Cash on exit Equity Value on exit Cash flow to equity holders IRR (%) (8.013.0 x 16.6 Retired 7.440.0 18.9 8.9 22% -4% 2% .344.9 9.3 EV 25.9 x Exit in years 4.0 IRR) Implied Price 14.000.9) 9% 20.1 22.000.0 Fees 541.396.396.4 x 5.9 Current share price 13.968.918.0 25% Reverse Engineering (To resolve at actual premium paid for desired IRR) Target IRR (%) 20% Exit Multiple 5.0 Exit EBITDA 4.4 2.948.9 x 16.0 3.000.000.9 2.129.968.5 39885.3 18% -1% 5% 5.000.5 0.0 0.8 Net Debt 12.2 Equity at exit 12.8 x 16.9 x 5.0 Total Sources 36.248.000.9 x 16.4 19% -2% 4% 5.8 x 16.0 Equity (Target should have been valued for desired 27.905.471.0 10.809.6 20% -2% 4% 5.4 8.6 Implied Equity at beginning 6.7 21% -3% 3% 6.89943 Minimum cash 2.0 6.306.

9 8.5 456.396.5 (2.3) 6.hat is this for? how is this allocation done intially? 2016E 2017E 9.9) 8.071.880.4 (515.809.880.2 392.2 .

9) 1.0 2017E 4 why doesn’t this interest expense include interest from the debt schedule? operating WC is ac recievable and inventory .0 600.0 2016E 52.9 2.9 4.492.1 3.981.3) 0.0) (992.737.3) (278.0 0.920.1 (159.370.9 (456.071.0 (23.522.0 0.8 6.000.0 0.816.000.306.0 0.9) (532.2) (515.2) (600.1) (521.0 0.883.000.000.0 (2.9) 0.208.000.0 600.5) 0.0 (575.2) (526.2 13.3 (157.3 (515.6 (521.365.8) 2016E 2017E 4.0) (23.170.0) (1.5) 0.6) 2.1 (79.ac payable? why is this tax expense on revenue and not on EBT? .9) 0.0 0.071.528.9) (515.8) 0.0 0.0 8.761.702.9 8.000.5) (2.1 6.0 2.0 2.4) 13.0 0.3 (609.0 515.0 2017E 51.056.0 2016E 3 2.142.6) 157.0 8.9) (600.7) 3.3 (392.8.4 (471.

809.2 2.9 x 6.278.2 8.5 25.469.484.0 16.0 8.469.603.880.0 14.9 x 10% 15% 19% 9% 14% 18% 9% 13% 17% 8% 12% 16% 7% 11% 15% .0 12.8 6.880.000.24.809.000.5 2.6 0.5 8.0 9.6 Exit Multiple EV/EBITDA(LTM) 5.000.0 12.000.4 x 6.

.

from the debt schedule? .

903.0 0 Diluted shares (mm) Acquisition equity value Exisiting Debt Minority Interest Cash and cash equivalents Acquisition Enterprise Value EBITDA (LTM) EBITDA multiple (LTM) 37.00 6.1 37.0 9. on Senior Debt Int exp.9 12.7 259.452.511.1 x 2.5% Sources and Uses of Funds Uses Acquisition Equity Value Debt Retired Minimum Cash Financing Fees Advisory Fees Total Sources Existing Cash Senior debt Sub.0 0.0 3.0% 1.1 4.4 327.860.000.154.70 204.00 3.0 .6 1.6 Debt Schedule Senior Debt Beginning Balance Repayment Ending Balance Interest Expense 6.4 20% 184.3 12.0% 6.000.000.748.9 4.0 6.6) 4.0 0.0 4.903. Debt 6.0 0.9 2011 2012 3.450.452.7 3.0 49.27 Exercise Price ($) 0 0 0 0 0 Restricted Stock Units RSUs outstanding (mm) 0 0 0 0 0.9 2.0 0.096.LBO Model for YUCHAI (Ticker: CYI) Circularity FY ending on Latest 10F available as of 1 31-Dec-12 31-Dec-12 Enterprise Value Calculation Acquisition date Share price ($) Premium paid Acquisition share price($) Basic shares outstanding (millions) Dilutive Securities Options Options (mm) 6-Nov-13 153.4 (1.157.000.860.000.0% 7.5% 100.450.9 2013E 2014E 6.0 Dilutive effect 0.000.1 x Assumptions Exit year Exit EBITDA multiple Financing fees as a % to Debt raised Advisory fees % of Enterprise Value % of existing debt retired Int exp.0 92.7) 3.3 6.154. Debt Total Debt Sponsor Equity Total 6.157. on Sub.9 2.0 295.0 (1.

5% (226.576.76 6591.921.73 243.154.371.000.0 0.1) (183.06 Trade and bills recievables 6690.0 0.3) 0.6 15.2 Interest-bearing loans and borrowings 3.1 2.244.3 17.4 610.0 2.00 12.832.6) (197.6 40.000.0 2011 2012 15.511.0 0.0) (484.58% (213.2 4.7) 0.400..0 450.0 1.3) (212.6% 1.308.0 Provision for product warranty 307.4) (9.096.781.0 0.2 2.269.671.3 565.7 (1.0 6.5 1.1 14.6 15. (Sub.595.0 (146.444. net EBT Tax rate Tax expense as a % of Revenue Tax expense Dividends paid Shares issuance/ (repurchases) Cashflow Statement EBITDA Less: Int exp.0 0.299.511.0 4. Debt) Total Interest expense Tax expense (Inc)/ Dec in Operating Working Capital (Inc)/ Dec in other long term assets Inc/ (Dec) in other long term liabilities Less: Capex Less: Dividends paid Share issuances/(repurchases) FCF Repayment of Senior Debt Repayment of Subordinated debt 1863. (Senior Debt) Less: Int exp.86 Other recievables 466.29 Other current assets 96.1 1.6) (225.8 Other long term liabilities as a % of Revenues 3.0 0.924.1) 492.0) 616.8) 1.5 1.Subordinated debt Beginning Balance Repayment Ending Balance Interest Expense 3.5% 1.3 57.5% 5.235.163.6) 0.1) (450.000.1% Inventories 2416.4 1.154.9 Other long term assets as a % of Revenues 34.000.92 Prepayments 100.234.0) 913.8) 13.5) 42.2 692.0% Other long term assets 5.4 Trade payables 7.1 Total Current Liabilities 11.6 (81.3 (259.0 2013E 3.0 0. Working Capital 2.0 2011 2012 3.0 692.0 3.931 (156.3 2013E 2014E 1.1% (142. As % of Revenue Int.9) (170.0 (1.254.0) (142.4) 0.1% 556.33 0.096.702.2) 1.6 641.8) 45.61 341.551.0 5.8 Op.9) (431.8 Provision for taxation 142.6 1.137.5 268.5 5.1 (777.01% (156.443.6% 616.22 Total Current Assets 9.0 1.74 53.7% Other long term liabilties 565.0 9.8 9.0 2014E Income Statement items Revenues EBIT Int exp.3 0.3% 2010.6) 886.8 1.5 1.0) (777.0 14.9 (213.449.3% Capex 657.0 225.exp.2) Balance Sheet items Operating WC as a % of Revenues 15.535.2) (226.4 641.338.00 Prepaid operating leases 11.6 1.2) 414.79 9.000.8 Other current liabilities 0.3 (198.07 Income tax recooverable 0.0 Capex as % of revenues 4.0 3.339.3 (327.0 .7 9.5 (484.

0 1.513.903.1 20% 91% 94% #REF! 185.0 Cash 3.0 Exit EBITDA 1.929.0 3.89943 Minimum cash 3.0 2013E 1 6.0 2011 Returns to Equity holders Enterprise Value on exit Senior Debt on exit Subordinated Debt on exit Total debt on exit Cash on exit Equity Value on exit Cash flow to equity holders IRR (%) 2012 0 (295.180.450.6 Implied Equity at beginning 2.2 22% 81% 83% .1 x Exit in years 6.0 Fees 141.000.285.748.0 0.000.5 4.596.000.0 25% Reverse Engineering (To resolve at actual premium paid for desired IRR) Target IRR (%) 20% Exit Multiple 4.9 x 5.0 7.9 39885.7 Net Debt 796.9 Total debt (raised) 9.000.000.8 0.000.6 19% 98% 101% #REF! 184.3 Retired 2.004.7 3.4 3.903.748.000.0 3.9) 87% 0.0 3.985.1 Equity at exit 7.0 18% 108% 111% #REF! 182.6 Current share price 153.0 6.439.1 2014E 2 6.4 3.0 Total Sources 14.7 Equity (Target should have been valued for desired 9.5% Sensitivity Analysis Exit Multiple EV/EBITDA Entry EBITDA multiple Stock Price ($) Premium 87% 4.0 0.000.000.9 IRR) Implied Price 241.4 Premium to current 57.157.6 21% 86% 88% #REF! 187.7 3.4 EV 8.Net cash flow Cash balance 3.416.5 3.4 x #REF! 181.081.

2015E 2016E 2017E 3.1 2.0 23.2) 2.1 95.1 (796.748.5 (1.387.387.9 2018E 0.591.5 796.0 0.5 184.4) 796.0 0.0 0.0 .361.7 (1.1) 0.

9604 1865.0 225.5) 52.139.8) (587.0 0.79 21316.3 1.0) (409.2) (215.4) 0.517.0 2015E 16.6 1.0 (796.0 (1.3.0 0.8 (72.5) 1.6 (209.4 (95.0 what all to include? which long term assets and liabilities have to be included? 2144.5 2.8 2017E 2018E 19738.6 747.9 61.5) 0.6 2.5) calculated capex as diff betweenPurchase of property.924.000.059.277.0 1.7 2.000.0 (250.985.8) 1.0 3.7 1.0 (211.5 1.2 769.0 3.3) 48.5 185.480.838.1) (1.2) 0.9) 2.1 830.1) 0.1) (225.7 (320.4 (184.0 941.098 2315.6) (295.0 (1.345.8) (184.0 0.5) 1.5102 (23.0 225.000.4 712.5) (230.5) 0.2 659.0 0.940.0 2016E 18.361.829 1726.7 807.5) (466.3) (72.792.5 (1.3) 56.691.0 (1.8 747.6 0.4 0.157.0 0.492.2) 1.361.940.6 807.3) (269.591.059.0 72.802.8) (209.7 2015E 2016E 2017E 2018E 1.298.0 941.0 0. plant and e .933.2) (72.5 872.599.591.9 7.940.0 1.9) 0.0241 (409.940.000.5) (225. plant and equ Proceeds from disposal of property.8) (249.1) (213.3) (503.906.1) 1.4 872.9) 0.000.278.1 7.071.0 (185.855.1 3.5 6.2) (232.8) (199.3 (176.4) (543.9 3.2 1.3 6.4 (1.0) (320.7 3.

0 0.7 796.0 0.9 x 113% 115% 118% 103% 106% 108% 96% 98% 100% 90% 92% 94% 86% 88% 90% 12.0 9.000.5 3.0 3.0 216.1 3.0.5 3.5 2015E 3 7.5 2.727.1 0.0 3.387.940.0 1.4 x 6.940.0 0.0 5.000.216.6 0.000.5 3.9 0.000.0 3.1 .000.000.6 2017E 5 8.285.000.5 3.5 12.0 3.483.0 2016E 4 8.425.3 2018E 6 9.0 3.1 3.0 0.387.787.0 5.081.096.642.5 1.9 x 6.0 7.0 0.0 0.216.000.796.0 Exit Multiple EV/EBITDA(LTM) 5.642.

.

have to be included? Purchase of property. plant and equipment om disposal of property. plant and equipment .