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Tango Victor Case

Victor has offered to acquire Tango for $370 million. The offer will be financed through $280 million in bank debt at 5% interest and $90 million in subordinated debt at 10% interest paid partially in cash and partially through payment-in-kind notes. The acquisition is expected to generate cost synergies and revenue growth that will allow Victor to repay the debt within 5 years.

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Yevgeniy Sydorenko
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214 views7 pages

Tango Victor Case

Victor has offered to acquire Tango for $370 million. The offer will be financed through $280 million in bank debt at 5% interest and $90 million in subordinated debt at 10% interest paid partially in cash and partially through payment-in-kind notes. The acquisition is expected to generate cost synergies and revenue growth that will allow Victor to repay the debt within 5 years.

Uploaded by

Yevgeniy Sydorenko
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Tango vs.

Victor
Victor
data
share price
tender offer
shares out. (in $m)
excess cash (in $m)
Debt under repay
Management deal
whole amount
managem. Invest
borrowed
at interest rate
dividend<FCFE

20
25
20
5 2% int.
50

38 (in $m)
19
19
11.50% per annum

senior
interest rate
Subordinated
interest rate
sum
Transaction costs
success fee
banking fee
legal fees (est.)

(in $m)
in 8 equal
Bank debt
installments
280 (paid in cash)
5%
90 (70% cash
10% ,30% PIK)
370
calculated
1% of the acquisition cost value
2%
7.4
2.15 in ($m)

Table of Sources and Ap

able of Sources and Applications of Funds

Year ending 31 Dec 2006


Revenues
Operating expenses
EBITDA
Depreciation & armotization
EBIT
Interest expenses
Profit before tax
Taxes 33%
Net earnings

450
360
90
20
70
2.7
67.3
22.20
45.10

REVENUE GROWTH
Revenue
EBITDA margin
OWC (as % of revenue)
Capital expenditure
Depreciation & Armotization
remaining payment on Debt
interest rate on debt 4.5%

EBITDA margin
OWC (as % of revenue)
REVENUE GROWTH
corporate tax 33%

Scenario 1
2006
2007
7%
450
481.5
20%
20%
15%
15%
12000000
15000000
50000000
40000000
2250000
1800000
Scenario 2
2007
20%
15%
6.50%

2008
20%
11%
3.50%

2008
6%
510.4
19%
15%
15000000
15000000
30000000
1350000

2009
21%
11%
8%

2009
5%
535.91
18%
15%
17000000
15000000
20000000
900000

2010
21%
11%
8%

2010
2011
5%
562.70
16%
16%
15%
15%
20000000 20000000 euros
18000000 20000000 euros
10000000
0
450000
0

interest rate on debt


4.50%

Private Equity Fund

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