Butler Capital Partners and Autodistribution

1. What is your assessment of Autodistribution's chances for pan-European expansion?
2. If Autodistribution were publicly traded, what would you calculate the market value of its equity to be?
3. What rates of return do you expect for equity holders and each tranche of senior debt and subordinated debt for this investment given the forecasted financials and capital structure?
   • Is this rate of return sufficient from Butler Capital's perspective?
   • Are the rates of return fair for the risks being taken from the perspective of the markets?
   • You should consider the assumptions for margin improvements and growth in Exhibit 18 of the case in answering these questions.
4. For the previous question, suppose that Tranches A and B wanted to have total returns of 7.5% and 10.0%, respectively, in order to participate in this buyout.
   • Adjust the structure of these tranches utilizing warrants and PIK bonds to achieve these returns. What are the resulting returns of the equity holders and the subordinated debt holders with your new financing structure?
   • Suppose Butler Capital is targeting a return on all investments into its second fund that is 200 bps higher than they achieved in their first fund. Is it possible to structure the financing to achieve this along with the higher returns demanded by the Tranche A and B lenders? How?
5. What are the major risks associated with this investment? What can Butler and his team do to mitigate these risks? What and when is Butler's likely exit from this deal?
6. Should Butler submit a proposal for Autodistribution?