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 $4.8m per year. Mezz PIK accrues to principal. All FCF after mandatory debt service sweeps to the TL.Read the full answer
Initial Setup & Equity Calculation Item Calculation Amount ($m) Purchase Price $120m × 12.0x 1,440.0 Transaction Fees $1,440m × 2.0% 28.8 Total Debt ($480m TL + $180m Mezz) 660.0 Initial Equity $1,440 + $28.8 − $660 808.8 Year-by-Year Model (FY2026–FY2030) (All figures in $m, rounded to 1 decimal.Read the full answer