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 Underwriting Entry Summary Amount Multiple Enterprise Value $1,440.0m 12.0x Transaction Fees (2.0%) $28.8m — Total Uses $1,468.8m Sources Amount Multiple Term Loan (9.0% cash, 1.0% amort) $480.0m 4.0x Mezzanine (12.0% cash + 2.0% PIK) $180.0m 1.5x Sponsor Equity $808.8m Total Sources…Read the full answer