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
LBO Model: Year-by-Year (FY2026–FY2030) Entry Capital Stack (End of FY2025) Purchase Price: $900m Rev * 12.0x = $1,440.0m Transaction Fees: 2.0% of $1,440.0m = $28.8m Total Enterprise Value: $1,468.8m Total Debt: 5.5x EBITDA ($120m) = $660.0m Term Loan: 4.0x = $480.0m Mezzanine: 1.5x = $180.0m Equity Injection…Read the full answer