Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
Sources & Uses / Entry Setup Enterprise Value (EV): $120m EBITDA × 12.0x = $1,440.0m Transaction Fees: 2.0% × $1,440.0m = $28.8m Total Uses: $1,468.8m Term Loan: 4.0x × $120m = $480.0m (9.0% cash, $4.8m/yr mandatory amort) Mezzanine: 1.5x × $120m = $180.0m (12.0% cash, 2.0% PIK) Total Debt: $660.0m Total Equity…Read the full answer
518.51935 New TL: 276.34682 - 86.82747 = 189.51935 Mezz: PIK 194.8377888 * 0.02 = 3.896755776 New Mezz: 194.8377888 + 3.896755776 = 198.734544576 Ending Balances: TL: 189.52 Mezz: 198.73 Total Debt: 388.25 Exit (End of FY2030): Exit EBITDA: 206.6252668 Exit Multiple: 10.5x Exit EV: 206.6252668 * 10.5 = 2,169.5653014…Read the full answer