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) Simplified Year-by-Year Model (FY2026–FY2030) Entry Metrics (FY2025) Revenue: $900M EBITDA: $120M EBITDA Margin: 13.3% Purchase Price = 12.0 × $120M = $1,440M Transaction Fees = 2.0% × $1,440M = $28.8M Total Uses = $1,440M + $28.8M = $1,468.8M Total Leverage at Close = 5.5x × $120M = $660M Term Loan: 4.0x → $480M…Read the full answer