Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
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
Year-by-Year Financial Projection (FY2026–FY2030) Assumptions: Revenue Growth Rates: FY2026: 8%, FY2027: 7%, FY2028: 6%, FY2029: 5%, FY2030: 5% EBITDA Margins: FY2026: 14%, FY2027: 15%, FY2028: 16%, FY2029: 16.5%, FY2030: 17% Capex: 3% of revenue ΔNWC: 0.5% of incremental revenue Cash Tax Rate: 25% on max(0, EBITDA…Read the full answer