Reply to thread

Message: <blockquote data-quote="CharlesT47" data-source="post: 218222" data-attributes="member: 41021">Having listened to FT's podcast on the EA take private, there are some additional thoughts. First, I didn't pay attention to the debt/ equity mix. The funding for the transaction was $36 billion worth of equity and $20 billion debt. According to the FT, this is quite a modest ratio. Typically, PE companies purchase other companies by taking on far more debt. I am interested though in how these institutions decide on the debt/ equity ratio. Whilst using more equity means that this is a safer decision with less immediate pressure to earn (as there are fewer interest rate payments), I don't know why they aren't using more leverage as surely that would lead to more potential gain? This could mean that there is a lot of 'dry powder' around, with firms eager to spend cash instead of letting it sit around. I will need to do more research to understand this point. Second, the entirety of the debt was funded by JP Morgan. The due dilligence for this sum took less than a week. This is so interesting to me. Why is JP Morgan so relaxed with this specific transaction. They must either have a lot of faith in AI technology, or they believe strongly in Silver Lake Capital's expertise.</blockquote>

Verification: Our company is called, "The Corporate ___ Academy". What is the missing word here?

Top Bottom