Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
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
1) Year-by-Year Table (FY2026–FY2030) Entry (FY2025): Revenue: $900m EBITDA: $120m Purchase Price: 12.0x EBITDA = $1,440m Transaction Fees: 2.0% × $1,440m = $28.8m (funded by equity) Total Leverage: 5.5x EBITDA = $660m Term Loan: 4.0x EBITDA = $480m (9.0% cash, 1.0% amort) Mezzanine: 1.5x EBITDA = $180m (12.0% cash…Read the full answer