Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
Assumptions used Term Loan amortization = 1.0% of original $480m = $4.8m/yr Mezz PIK accrues to principal; mezz cash interest calculated on beginning mezz balance including PIK Cash taxes use: 25% x max(0, EBITDA - total cash interest); PIK is not cash-deductible FCF after required debt service is used for optional…Read the full answer
HarborTech Services — 5-Year LBO Summary Entry Math EV = 12.0x × $120m = $1,440.0m; Fees (2%) = $28.8m; Total uses = $1,468.8m Debt: TL = 4.0x × 120 = $480.0m; Mezz = 1.5x × 120 = $180.0m; Total = $660.0m (5.5x) Sponsor equity = $808.8m Base Case Projection ($m) FY26 FY27 FY28 FY29 FY30 Revenue 972.0 1,039.7 1,102.1…Read the full answer