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
Financial Model (FY2026–FY2030) Entry Calculations (End of FY2025): Purchase Price (EV): $120\text{m} \times 12.0\text{x} = \$1,440\text{m}$ Transaction Fees: $1,440\text{m} \times 2\% = \$28.8\text{m}$ Total Uses: $\$1,440\text{m} + \$28.8\text{m} = \$1,468.8\text{m}$ Debt (Total 5.5x): $\$120\text{m} \times 5.5 =…Read the full answer