Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
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
Entry & Capital Structure Math Entry EV = 12.0x × $120m EBITDA = $1,440.0m Transaction Fees = 2.0% × $1,440m = $28.8m (equity funded) Total Uses = $1,440.0m + $28.8m = $1,468.8m Debt Raised = 5.5x × $120m = $660.0m Term Loan: 4.0x = $480.0m (9.0% cash, 1.0% mandatory amort = $4.8m/yr) Mezzanine: 1.5x = $180.0m (12.0%…Read the full answer