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
Step 1: Calculate the purchase price and transaction fees First, we need to calculate the purchase price and transaction fees. The purchase price is 12.0x EBITDA, and EBITDA in FY2025 is $120m. So, the purchase price = 12.0x * $120m = $1440m. Transaction fees = 2.0% of enterprise value = 2.0% * $1440m = $28.8m.Read the full answer