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 Table (FY2026–FY2030) Assumptions: Revenue growth: FY2026: 8% on $900m = $972m; FY2027: 7% on $972m ≈ $1,040m; FY2028: 6% on $1,040m ≈ $1,102m; FY2029: 5% on $1,102m ≈ $1,158m; FY2030: 5% on $1,158m ≈ $1,215m. EBITDA: Revenue × margin (FY2026: 14%; FY2027: 15%; FY2028: 16%; FY2029: 16.5%; FY2030: 17%).Read the full answer