Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
YEAR-BY-YEAR OPERATING MODEL Entry Calculations: Enterprise Value = 12.0x × $120m = $1,440m Transaction Fees = 2.0% × $1,440m = $28.8m Term Loan = 4.0x × $120m = $480m Mezzanine = 1.5x × $120m = $180m Total Debt = $660m Equity = $1,440m - $660m + $28.8m = $808.8m Operating Model (FY2026-2030): ($m) FY2026 FY2027 FY2028…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