Private Equity Due Diligence: Real World Example | Mink Learning

Steve discusses a real incident where he had to perform private equity due diligence and why it is important for investors when making deals. This Mink Learning video covers:
0:00 - Introduction
0:52 - Start of example
1:24 - What to look for in the Confidential Information Memorandum (CIM)
2:15 - The issue in the CIM and why it is important
3:38 - The reason for adjusting certain performance metrics
5:25 - Tip for investors
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Disclaimer: All investment and financial information expressed in this video is for educational purposes only.
#MinkLearning #privateequity #duediligence #investment

[@SteveBalaban]

Hello Everyone! We are very excited to announce that the Ultimate Private Equity Course has launched!! This course includes over 70+ videos, 60+ real world problems and solutions, 40+ real world private equity case studies, 200+ multiple choice questions and much more.
To sign up for the course please visit:
training.minklearning.com/the-ultimate-private-equity-course

[@denisafinco]

Steve Balaban you are the best! Thanks for sharing your knowledge.

[@SteveBalaban]

Hi Denis, I really appreciate your message! Thank you very much!

[@simozamb7835]

Thank you Steve for sharing real world due diligence experience ! Great and clear video, as all other videos of yours!

[@SteveBalaban]

Thank you Simona. I hope you have been doing well!

[@AdnanKhan-uc7ms]

Excellent video - the example made it so easy to understand the process

[@SteveBalaban]

Thank you very much, Adnan! I appreciate you leaving this comment.

[@shashanksh9956]

Your videos are the best ever!!! Thanks Steve 😊

[@SteveBalaban]

Thanks so much, Shashank! I really appreciate your comment!

[@AC-zq9tv]

Thank you for explaining so well!

[@SteveBalaban]

Thank you for your comment, AC!

[@jackgostomski295]

Steve - Thanks for the great content!

[@SteveBalaban]

Thanks a lot, Jack. I appreciate the comment!

[@shubhankertuteja2711]

Hi Steve, this was a great video! Amazing content as always.
I had 1 generic question,
What is the difference between an "acquisition" and a "buyout". Basis my best understanding, they both essentially mean purchasing the company. In case there are any other smaller details that differentiate the 2 terms that I am missing out, would love to hear your thoughts on the same.

[@betweenherenthere]

lifesaver.

[@RafiyaShaikhrafiya]

Hi Steve, I understand that this specific deal had intentionally hidden flaws with the company and did not align with your interests. However, in some cases, a PE fund maybe able to buy at a lower valuation, fix the inefficiencies with that firm and sell at a higher value, right? Just wondering if such a situation can be turned around by PE firms in some cases.

[@robmetalhead6185]

Hi Steven this is Robbie great video

[@SteveBalaban]

Thank you Robbie!

[@jbrunogds]

Awesome video.

[@SteveBalaban]

Thank you very much, João!

[@santhosh8290]

Could you explain how they manipulated EBITDA

[@SteveBalaban]

Hi Santhosh, thanks for your message. I wouldn't say that bankers "manipulated" EBITDA, but they made adjustments to EBITDA. In this case, the bankers claimed that many expenses were "one-time" and removed them from the adjusted EBITDA calculation (by removing one-time expenses, this will increase adjusted EBITDA). Another adjustment was that the bankers adjusted employee salaries claiming that they should be lower (by adjusting down employee salaries, this will increase adjusted EBITDA). I hope this helps answer your question.

[@nathanlindley]

@@SteveBalaban, I recently looked at a company that had "one-time adjustements" each year for a very similar amount. I didn't ask what they were and maybe the rationale was that they were discretionary, but they certainly weren't "one-time!"

[@branhamchima]

Why is your hand constant in that pattern move?
Lol.
Thank you for the video.

[@Okwejamesk5h]

thank you for watching. For more useful information on trading and investment guides, you can send us a message via Telegram🚀….

[@annajones9701]

Hi Steve, great videos. Just wondered if you also invest in real estate?

[@SteveBalaban]

Hi Anna, thanks for your message here as well. I appreciate your engagement in the comments section.
I have invested in real estate, but my expertise is in private equity. With that said, I will create a video on real estate in a couple of weeks (will post it August 17th, 2021) since you and some other people have asked about it. I hope it will be helpful.
If you have any other questions, please let me know. Thanks Anna.

[@annajones9701]

@@SteveBalaban Thanks appreciate it.

[@Okwejamesk5h]

thank you for watching. For more useful information on trading and investment guides, you can send us a message via Telegram🚀….