Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
Below is a concise but fully worked underwriting using only your inputs. Minor rounding throughout. Operating & Cash Flow Build (Base Case) Entry (end FY2025) EBITDA: $120m EV @ 12.0x: $1,440m Debt: $660m (TL $480m / Mezz $180m) Fees (2% EV): $28.8m Equity invested: $808.8m Year-by-Year Summary ($mm) FY Revenue EBITDA…Read the full answer
Entry (end-FY2025) EV = 12.0 × $120m = $1,440.0m Fees = 2% × 1,440 = $28.8m (equity-funded) Uses = $1,468.8m Debt = 5.5× = $660.0m (TL $480.0m / Mezz $180.0m) Sponsor equity = $808.8m opening cash = $0 Convention: cash interest and PIK on beginning balances; 1% original TL amort = $4.8m/yr; optional sweep of all…Read the full answer