What is a Leveraged Recapitalization? A leveraged recapitalization involves changing the capital structure of a company by increasing debt and reducing equity. This means a corporation will borrow money (i.e., issue bonds) to generate cash proceeds, which will then be used to repurchase previously issued shares and reduce the proportion of equity in the company’s…
What is Equity Carve-Out? Through the process of an Equity Carve-Out, a company tactically separates a subsidiary from its parent as a standalone company. The new organization is complete with its own board of directors and financial statements. The parent company usually retains its controlling interest in the new company. It also offers strategic support…
What is an Investment Banking Pitch Book? An investment banking pitch book is a PowerPoint presentation designed to win new business. The “pitch” is typically an explanation of why the bank in question is best suited to lead the transaction and why they should be engaged by the client. There are various types of pitches,…
What is Liquidation Value? Liquidation value is an estimation of the final value that will be received by the holder of financial instruments when an asset is sold, typically under a rapid sale process. A business is typically liquidated as part of a bankruptcy process and tangible assets are sold quickly, often for pennies on…
Investment Pitch Deck Template CFI’s free investment pitch deck template can be used to create your own pitch for raising capital or present to investors to tell your story. How To Structure Your Pitch Deck Let’s look at how to structure the pitch from start to finish. The whole deck should ideally be…
What is a Term Sheet? A term sheet outlines the basic terms and conditions of an investment opportunity and is a non-binding agreement that serves as a starting point for more detailed agreements – like a commitment letter, definitive agreement (share purchase agreement), or subscription agreement. Term sheets are often produced by investment bankers on…
Why Does Warren Buffett Dislike EBITDA? Warren Buffett is well known for disliking EBITDA multiples to value a business’s financial performance. But why? EBITDA stands for “earnings before interest, taxes, depreciation, and amortization.” It is one of many indicators of a company’s financial performance; however, it excludes depreciation and amortization on the basis that they…
What is a Greensheet? A Greensheet (or Green Sheet) is a summary of the key attributes of the issuer of an offered security used by the sales force when they solicit expressions of interest from prospective institutional investors and brokers. It is an internal marketing document and cannot be shared outside of the bank. Greensheets…
What is an Equity Capital Markets ECM Deals Committee Memo? An Equity Capital Markets (ECM) Memo is generated internally at an investment bank to approve a potential transaction (IPO, follow-on offering, etc.). The ECM Memo is prepared by the investment banking team and sent to the ECM team. Download the ECM Deals Committee Memo Template…
Due Diligence Checklist Below is an example of a due diligence checklist for mergers & acquisitions, capital raising, and other transactions. The due diligence checklist includes over 25 items that range from financial to legal to operations items that should be verified before completing the transactions. Example – Due Diligence Checklist Items What is the bank’s…
