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
Base-case underwriting (FY2026–FY2030) Assumptions / conventions used All amounts in $m unless noted. Close occurs at end of FY2025; FY2026 is Year 1. Interest is calculated on beginning-of-year debt balances; optional Term Loan paydown occurs at year-end. Term Loan amortization: 1.0% of original $480m TL = $4.8m/yr.Read the full answer