Business Case Studies & Business Publications

Lonestar Graphite

Harris, Robert S.,...

Case

Lonestar Graphite

Harris, Robert S.; Gaede, Jason

F-1595 | Published July 27, 2009 | 19 pages Case

Collection: Darden School of Business

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Lonestar Graphite is a potential purchase for a middle-market private equity firm. The private equity firm must decide what to offer for an equity position in Lonestar, based on both the underlying operations of the firm and the availability of other sources of funds (largely debt) to finance a transaction. Opportunities for analysis include application of a number of valuation techniques including variations of discounted cash flow models and multiples.

To introduce students to private equity transactions To value a levered acquisition using a number of methods To perform sensitivity analysis on value To apply the equity residual approach to valuation