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Product Description 


(Private Placement: Cash Deal Financed by Sponsor’s Equity and Debt, Structured as a Stock Sale; Assessment of Suitability of a Target of Private Placement from Leverage, Control and Privatization Perspectives)


Northland Power Inc. Financial Model is a financial model of a North American, Canadian independent power producer hypothetical private placement by a consortium of investors. The analysis is an assessment of suitability of Northland Power Inc. as a target of private placement from leverage, control and privatization perspective. The deal is assumed to be a cash deal financed by mostly sponsor’s equity as well as debt, and structured as a stock sale.  The model is ideal for investment banking, equity research, power and utility and private equity finance professionals, valuation and transaction experts. The model includes the following features:

  • An annual 3-statement financial model of this independent power producer under the existing management and the private equity team including: a detailed power industry revenue schedule, power industry cost schedule, depreciation schedule, working capital schedule, tax schedule, debt and interest schedule, shareholder’s equity schedule, covenants and credit statistics, income statement, cash flow statement and balance sheet for a fifteen year forecast period.
  • Internal rate of return (“IRR”) schedule, cash on cash return and value added at the operating company (“OPCO”) level given the initial investment by the sponsors by 2019FYE, the assumptions made with respect to the OPCO dividends and its use, calculation of paid-in-kind and cash interest expense on Mezzanine debt tranches and its integration in the model, and annual exit throughout 2022 to 2035.
  • Leveraged buyout model along with the sources and uses of funds at OPCO given the stock sale financed mostly with sponsor equity, debt including Mezzanine debt, asset backed revolver, and senior notes while assuming the existing long term debt on the balance sheet as of 2019FYE, transaction fees, purchase price allocation, and calculation of goodwill created on the pro forma balance sheet in the transaction given the deal assumptions and financial disclosures.
  • Refinancing of term debt at 5 and 10 years marks along with a dividend recapitalization schedule at 5th and 10th year mark.
  • Recapitalized pro forma balance sheet of the company that is taken private.
  • Historical financial statements of Northland Power and the resulting credit statistics from 2015 to 2019.
  • Assessment of Company’s leverage, capital structure, value and privatization as an unsuitable target for a take private transaction.
  • Calculation of unlevered free cash flow (“Free Cash Flow to the Firm”, ”FCFF”, or “UFCF”).
  • Valuation of the revamped company under the guidance of the management and private equity team, based on intrinsic value approach.
  • Relative valuation of the Company prior to the transaction given FY1 and FY2 EV/EBITDA multiples of peers.
  • Implied share price under the guidance of the management team and the private equity firms as a result of their efforts to improve operating efficiency and capital structure.
  • Quantification of risk measures for purposes of valuation including beta calculation, cost of equity and cost of capital calculation throughout the forecast period given the changing leverage of the company as debt is paid down.
  • Sensitivity analysis of the intrinsic valuation of the revamped company with respect to term year weighted average cost of capital and term year growth rate.
  • Scenario analysis for Base, Best and Worst Case inflation, heat rate, natural gas prices and the resultant three statement financial model, implied valuation, and exit IRRs of OPCO.
  • A simple automated summary dashboard for Base, Best and Worst Case of revamped company financial report, market data, transaction and IRR  schedules for all investors.
  • The tabs of the models are: Cover, Summary, Assumptions, Sources and Uses, Scenarios, Historicals, Model, Valuation, WACC and Notes.
  • A report of the transaction and the financial model describing different steps and segments of the model, the transaction terms and company valuation, IRRs and sensitivities as of 2019FYE, anatomy of a leveraged buyout (“LBO”) and criterias which make a successful private placement target along with the print ready format of the model is included with the package.

Northland Power Financial Model

    • This financial model is a circular, 3-statement model along with a comprehensive leverage buyout model with many other features explained in the product description. Please ensure prior to opening the excel sheet, iterative calculations within the excel workbook environment has been enabled under: File/Options/Formulas/Enable iterative calculations.
    • Set the Calculation options under File/Options/Formulas to ‘Automatic except data tables’. In case of the existence of data tables in the models, press F9 to refresh and update the table calculations.
    • The workbook contains a Macro in the form of the product Disclaimer which should be accepted by the user; hence, please enable macros in the workbook. The financial model itself contains no macros.
    • Please ensure the above steps are implemented prior to opening the excel sheet.
    • Please agree to the terms of use to be able to view the model.
    • If at any point #Value! appears in the Model and the results, toggle the circularity switch on the Assumptions tab to ON and then OFF to address the problem. This switch sets all interest expenses to zero when turned ON.
    • If any changes are applied to the assumption inputs in the model, toggle through the Scenario Switch on the Assumptions tab to Base, Best and Worst Case so that the Summary tab results are updated.
    • All blue font in the model are hardcoded inputs, black font is calculation, red font is the references to the blue inputs on the Assumptions tabs, and any orange cells are values sourced from Refinitiv.
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