Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
1) Year-by-Year Financial Projections (FY2026–FY2030) Metric FY2026 FY2027 FY2028 FY2029 FY2030 Revenue ($m) 972 1,040 1,102 1,157 1,215 EBITDA ($m) 136 156 176 191 207 EBITDA Margin (%) 14.0% 15.0% 16.0% 16.5% 17.0% Cash Interest ($m) - Term Loan (9.0%) 43.2 43.2 43.2 43.2 43.2 - Mezzanine (12.0%) 18.0 18.0 18.0 18.0…Read the full answer
HarborTech Services – LBO Underwriting Summary Entry Economics EV = 12.0x × $120m = $1,440m; fees = 2% × 1,440 = $28.8m; total uses = $1,468.8m Debt: Term Loan = 4.0x × 120 = $480m (9% cash, 1%/yr amort); Mezz = 1.5x × 120 = $180m (12% cash + 2% PIK) Sponsor equity = 1,468.8 − 660 = $808.8m (~55% of cap) Annual Model…Read the full answer