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
Let’s build the LBO model step-by-step using only the provided data. 1. SOURCES & USES (at Close – End FY2025) EBITDA (FY2025): $120m Purchase Price (12.0x): $120m × 12.0 = $1,440m Transaction Fees (2.0% of EV): 0.02 × $1,440m = $28.8m Total Use of Funds: $1,440m + $28.8m = $1,468.8m Debt at Close (5.5x EBITDA): Term…Read the full answer