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The Debt Trap

How leverage impacts private-equity performance

By Sebastien Canderle
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About the Author

Sebastien Canderle

Sebastien Canderle has more than 20 years of experience in the consulting and financial sectors in New York and London, including as an investor for various private equity firms. He is also the author of 'Private Equity's Public Distress', a book covering the impact of the financial crisis of 2008 on the buyout industry, and has been a contributor to several financial blogs as well as a business ... Read more on Sebastien Canderle

Contents Listing

Preface
Abbreviations and Lexicon
Introduction

Chapter 1. Tricks of the Trade

Part One. Asset-Shifting: Secondary Buyouts and their Offspring
Chapter 2. Gala Coral – Game on!

Part Two. Asset-Flipping: Recaps and Quick Flips, or the Art of Making a Quick Buck
Chapter 3. Hertz – The Need for Speed
Chapter 4. Celanese – Rich Chemistry

Part Three. Financial Engineering and the Risks Pyramid
Chapter 5. TXU – Power Struggles
Chapter 6. EMI – Out of Tune

Part Four. Repurchases or Relapse Buyouts: Seller's Remorse
Chapter 7. PHS – Washed-up
Chapter 8. Frans Bonhomme – Down the Drain

Part Five. Listing, Delisting, Relisting: On a Fool's Errand
Chapter 9. DX Group – Going Postal
Chapter 10. Debenhams – Debt Never Goes Out Of Fashion

Part Six. Private Investments in Public Equity: PIPE Dream or Nightmare?
Chapter 11. PagesJaunes – The French Disconnection
Chapter 12. Seat Pagine Gialle – The Italian Job

Part Seven. PE-backed IPOs: The Search for a Patsy
Chapter 13. eDreams – Reality Fights Back
Chapter 14. Foxtons – Timing the Market

Part Eight. Asset-Stripping: Modern-day Creative Destruction
Chapter 15. Caesars Entertainment – PE's Version of Strip Poker

Part Nine. Trick or Treat
Epilogue. Sheriffs and Cowboys

Acknowledgements
About the author
Endnotes
Index
Preface
Abbreviations and Lexicon
Introduction

Chapter 1. Tricks of the Trade

Part One. Asset-Shifting: Secondary Buyouts and their Offspring
Chapter 2. Gala Coral – Game on!

Part Two. Asset-Flipping: Recaps and Quick Flips, or the Art of Making a Quick Buck
Chapter 3. Hertz – The Need for Speed
Chapter 4. Celanese – Rich Chemistry

Part Three. Financial Engineering and the ...

Jacket Text

This is the inside story of private equity dealmaking.

Over the last 40 years, LBO fund managers have demonstrated that they are good at making money for themselves and their investors. But when one looks beneath the surface of the transactions they engineer, it is apparent that these deals can, at times, go spectacularly wrong.

Through 14 business stories, all emanating from the noughties' credit bubble and including headline-grabbing names like Caesars, Debenhams, EMI, Hertz, Seat Pagine Gialle and TXU, The Debt Trap shows how, via controversial practices like quick flips, repeat dividend recaps, heavy cost-cutting and asset-stripping, leveraged buyouts changed, for better or for worse, the way private companies are financed and managed today.

From technological disruption in the worlds of music recording and business-directory publishing to economic turbulence in the gambling, real estate and energy sectors, highly levered corporations are often incapable of handling market corrections when debt commitments start piling up. Behind the historical events and the financial empires erected by some of the elite private equity specialists, these 14 in-depth case studies examine how value-maximising techniques and a short-cut mentality can impact investment returns and portfolio assets.

Whether you are a PE practitioner, investor, business manager, academic or business student, you will find The Debt Trap to be an authoritative and fascinating account.

Other books by this author

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The Debt Trap - Student Edition
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Media Coverage

Investors Chronicle

For the private investor, waiting for the latest initial public offerings is a bit like waiting to see what is on offer in the office canteen. There is no guarantee what exactly will turn up, the ...

Read more

Real Deals

Ex-Candover dealmaker Sebastien Canderle pulls no punches on private equity's love affair with debt
By Darragh Riordan

Follow link for full text.

Read more

ValueWalk

It is unclear what repercussions a Trump presidency will have on private equity. Its proposed repeal or dilution of the Dodd-Frank Act should encourage lending from banks, although that could ...

Read more

Pension Pulse

Blog posted by Leo Kolivakis

Sebastien Canderle, author of The Debt Trap: How leverage impacts private-equity performance, sent me a guest comment (added emphasis is mine):

It usually takes a ...

Read more

Economia

Over the last 40 years, leveraged buy-out fund managers have demonstrated that they are good at making money for themselves and their investors. But when one looks beneath the surface of the ...

Read more

The Financial Times

Private equity group attracts €25bn-€30bn of demand for its latest buyout fund

BY JAVIER ESPINOZA

CVC Capital Partners has tightened the terms being offered to new investors in its latest ...

Read more

Wall Street Mojo

#8 – The Debt Trap:
How leverage impacts private-equity performance

by— Sebastien Canderle

INTRODUCTION

Debt commitments of huge organizations start piling up when the companies are ...

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Fidelity

The Debt Trap by Sebastien Canderle
REVIEW BY OWEN JONES, FIDELITY PERSONAL INVESTING, 24 MARCH 2017

The Debt Trap by Sebastien Canderle, published by Harriman House

Do you remember Go for ...

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Wharton Magazine

Call it “the art of the leveraged buyout.” In The Debt Trap, Canderle explores some of the more controversial business strategies such as quick flips, repeat dividend recaps, heavy cost cutting, ...

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MoneyWeek

Please follow link to full article on the website.

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Investors Chronicle

Excerpt. To read the whole article you will need to subscribe to Investor's Chronicle.

"In his book The Debt Trap Sebastien Canderle looks in detail at DX group to see what lessons can be learned. ...

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Professional Manager magazine

"Most students are taught that investors are rational and markets are efficient," says Sebastien Canderle, author of The Debt Trap. "The reality is that anyone who invests money is emotional, and ...

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