Request Foods, Inc.: The Product of the DeWitt/Draft Leveraged Buyout

Abstract

How does a potential buyer find a leveraged buyout deal? The first step towards LBO negotiations is finding the opportunity to buy a suitable company. Consequently, this remains the most difficult step. "The more one relies on a network of financial intermediaries to locate a target company, the greater the likelihood the deal will be shopped - particularly if the buyer is not already an established player. Developing a network of referral sources is the gate that must be entered before one can even play on the course.(4,p.9)" When an individual finds a LBO opportunity, the potential buyer must put together a meaningful, compact business plan. The plan addresses issues, such as cash flow and vulnerabilities, in order to "sell the financier". (4,p.9) The subsequent pages will try to create an understandable image of the leveraged buyout structure, as negotiations commence. Many basic LBO characteristics will be described. Furthermore, the LBO process will be emphasized through the analytical case study of the DeWitt\Draft leveraged buyout.