Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
Year-by-Year Table (FY2026–FY2030) Year Revenue ($m) EBITDA ($m) Cash Interest - Term Loan ($m) Cash Interest - Mezzanine ($m) Cash Taxes ($m) Capex ($m) ΔNWC ($m) Free Cash Flow ($m) Ending Term Loan ($m) Ending Mezzanine ($m) 2026 972.0 136.1 43.2 18.0 14.9 29.2 4.8 26.0 468.0 180.0 2027 1040.4 156.1 42.1 21.6 18.4…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