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
Sources & Uses at Entry All figures in $ millions. Uses $m Sources $m Enterprise value: $120 × 12.0x 1,440.0 Term Loan: $120 × 4.0x 480.0 Transaction fees: 2.0% × $1,440 28.8 Mezzanine: $120 × 1.5x 180.0 Sponsor equity 808.8 Total uses 1,468.8 Total sources 1,468.8 Assumptions: Term Loan interest is calculated on…Read the full answer