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) Year-by-Year Financial Projections (FY2026–FY2030) Key Inputs at Close (FY2025): Revenue: $900M EBITDA: $120M Purchase Price: 12.0x EBITDA → EV = $1.44B Transaction Fees: 2.0% × $1.44B = $28.8M (equity-funded) Total Leverage: 5.5x EBITDA → Debt = $660M Term Loan: 4.0x → $480M Mezzanine: 1.5x → $180M Equity Required…Read the full answer