Private Equity

“Private Equity” is an advanced corporate finance book that integrates a range of topics from a private equity investor’s perspective. The book presents a set of cases used in the Private Equity Finance class, an advanced elective course offered in the Harvard Business School MBA elective curriculum. The structure of the book follows the timeline of a typical investment. Starting with deal sourcing, due diligence and valuation, followed by execution of the transaction, including issues related to capital structure and governance, the book transitions to examining operational changes and management of the capital structure, closing with a set of cases related to exit. Intended for readers interested in working for private equity firms, investing in private equity as limited partners or providing investment banking or consulting services to private equity firms, “Private Equity” is also appropriate for readers who are interested in a more detailed exploration of corporate finance.

Table of Contents

Section 1: Deal Sourcing and Evaluation

Chapter 1.1 A Note on Valuation in Private Equity

Chapter 1.2 A Note on Capital Cash Flow Valuation

Chapter 1.3 RJR Nabisco

Chapter 1.4 HCA, Inc. (A)

Chapter 1.5 HCA, Inc. (B)

Chapter 1.6 Summit Partners—The FleetCor Investment (A)

Chapter 1.7 Summit Partners—The FleetCor Investment (C)

Chapter 1.8 Private Equity Valuation in Emerging Markets

Chapter 1.9 The Abraaj Group and the Acibadem Healthcare Investment (A)

Chapter 1.10 United Capital Partners (A)

Section 2: Deal Execution and Structuring

Chapter 2.1 United Capital Partners (B)

Chapter 2.2 Qalaa Holdings and the Egyptian Refining Company

Chapter 2.3 Berkshire Partners: Party City

Chapter 2.4 Hudson Manufacturing Company

Chapter 2.5 Note on LBO Capital Structure

Chapter 2.6 HgCapital and the Visma Transaction (A)

Chapter 2.7 HgCapital and the Visma Transaction (B- 1): Nic Humphries

Chapter 2.8 HgCapital and the Visma Transaction (B- 2): Oystein Moan

Chapter 2.9 Note on the Leveraged Loan Market

Chapter 2.10 Harrah’s Entertainment

Chapter 2.11 Charter Communications’ Bankruptcy

Chapter 2.12 Blackstone and the Sale of Citigroup’s Loan Portfolio

Section 3: Deal Management

Chapter 3.1 AXA Private Equity: The Diana Investment

Chapter 3.2 Momentive Performance Materials, Inc.

Chapter 3.3 Bain Capital: Outback Steakhouse

Chapter 3.4 BC Partners: Gruppo Coin

Chapter 3.5 Advantage Partners: Dia Kanri (A)

Chapter 3.6 TPG China: Daphne International

Section 4: Realizations

Chapter 4.1 Private Equity Exits

Chapter 4.2 Housatonic Partners— ArchivesOne, Inc.

Chapter 4.3 Ardian—The Sale of Diana

Chapter 4.4 A Note on the Initial Public Offering Process

Chapter 4.5 Knoll Furniture: Going Public

Chapter 4.6 Globant: Going Public

Chapter 4.7 HCA, Inc., LBO Exit

Section 5: Private Equity Firm Strategy and Management

Chapter 5.1 DW Healthcare Partners

Chapter 5.2 ABRY Fund V

About the Authors

Paul A. Gompers is the Eugene Holman Professor of Business Administration at Harvard Business School, USA. His research focuses on venture capital and private equity.

Victoria Ivashina is the Lovett-Learned Professor of Business Administration at Harvard Business School, USA. Her research is in the area of applied corporate finance with a primary focus on credit markets and private equity.

Richard S. Ruback is the Willard Prescott Smith Professor of Business Administration at Harvard Business School, USA. His research focuses on applied corporate finance, especially corporatecontrol transactions and valuation.