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
LBO Model (FY2026–FY2030) Entry Calculations (End of FY2025): Enterprise Value (EV): $120m × 12.0x = $1,440.0m Transaction Fees: $1,440m × 2% = $28.8m Term Loan: $120m × 4.0x = $480.0m Mezzanine: $120m × 1.5x = $180.0m Sponsor Equity: $1,440m - ($480m + $180m) + $28.8m = $808.8m Year-by-Year Table ($ millions): Item…Read the full answer