How a Private Equity transaction takes place and what are its implications

This paper is organized in two main macro-topics: firstly, a theoretical background on Private Equity and secondly, an application to the Blackstone-Hilton case. Thus, the first part sheds light on a generic definition of an LBO alongside with a thorough analysis of the PE firm, entity that completes a buyout, as well as the compensation structure of professionals inside a PE. Moreover, an extensive description of the steps leading to the completion of an LBO are laid down, as well as the capital structure of the target post LBO. The chapter concludes by analyzing the theoretical implications of a buyout, based on scholars' papers and researches.The second chapter resolves around an extensive analysis of the two parties involved (Hilton Hotels, the acquired entity, whose evolution over time has been scrutinized using its SEC filings, the hotellerie database MKG Consulting Database and papers on the effects of terrorism on tourism and Blackstone, the PE acquirer, examined thanks to Preqin database data and its SEC filings, and), as well as of the market conditions (with particular attention to the Real Estate industry and the CDO usage) at the time of the LBO (mid 2007). Finally, the deal terms and a consideration on why this case are interesting are studied using financial news and SEC filings.