LBO / buyout execution
Buying a company mostly with borrowed money, repaid from the company's own cash, the way private equity buys.
In an LBO, every deal collapses into one identity, EV − net debt − debt-like + cash-like ± working capital peg − minorities + associates + ticker − leakage = equity purchase price. That bridge is the central artefact, a living spreadsheet, often 200+ rows, fought over line by line. Sponsors bid on Enterprise Value because it prices the operating engine independent of the seller's financing; the bridge walks you to the cash the seller receives.
Locked box fixes price at signing on a historical balance sheet, with a ticker (4–8% simple) and a leakage indemnity, default in European sponsor deals. Completion accounts fix price at closing then true-up 60–90 days later via expert determination, default in the US.
W&I insurance is market standard in European PE. The buyer insures warranty breach with an A-rated carrier (retention 0.5–1% of EV, limit 10–20%), letting the seller exit clean. It costs 0.8–1.5% of the limit but is never primary protection.
Advisor fees on a £1bn deal run £30–50m. Sell-side M&A takes 0.8–1.5% of EV; debt arranging is the biggest bucket at 1.5–3.0% of underwritten debt, on a sponsor LBO it dwarfs the advisory fee. Each workstream has its own incentive structure, tiered fees, Lehman ladders, retainers, tails, abort fees, expense caps. The associate running the bridge coordinates them, bankers own headline EV and the peg, accountants own debt-like items, tax the tax lines, lawyers the SPA definitions, actuaries the pension.