Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
HarborTech Services – LBO Underwriting Memo ENTRY CAPITALIZATION (Close FY2025) Item Calculation Amount Purchase Price 12.0x × $120M $1,440M Transaction Fees 2.0% × $1,440M $28.8M Total Uses $1,468.8M Sources Multiple Amount Term Loan 4.0x × $120M $480.0M Mezzanine 1.5x × $120M $180.0M Equity Plug $808.8M Total Sources…Read the full answer
HarborTech Services: 5-Year LBO Underwriting Conventions: $m. Interest is charged on beginning-of-year balances, which avoids circularity. Term Loan (TL) amortization is 1% of the original $480m, or $4.8m per year. Mezz PIK accrues to principal. All FCF after mandatory debt service sweeps to the TL.Read the full answer