Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
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
1. Simplified Year-by-Year LBO Model (FY2026–FY2030) Entry Assumptions: Enterprise Value (EV): $120m × 12.0x = $1,440m Transaction Fees: $1,440m × 2.0% = $28.8m Total Debt at Close: $120m × 5.5x = $660m Term Loan: $120m × 4.0x = $480m Mezzanine: $120m × 1.5x = $180m Equity Required: $1,440m (EV) + $28.8m (Fees) − $660m…Read the full answer