Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
1. FY 2026 – FY 2030 cash‑flow build‑up ($ m) FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Revenue 972.0 1 040.0 1 102.4 1 157.6 1 215.4 EBITDA (‑% margin) 136.1 (14 %) 156.0 (15 %) 176.4 (16 %) 192.0 (16.5 %) 206.6 (17 %) Cash interest – TL (9 %) 43.2 41.0 37.6 32.8 26.8 Cash interest – Mezz (12 %) 21.6 22.0 22.5 22.9 23.4…Read the full answer
We need to build a simplified year-by-year table FY2026-FY2030. First, compute initial purchase price: EBITDA FY2025 = $120m. Purchase price = 12.0x EBITDA = 12 * 120 = $1,440m (enterprise value). Transaction fees = 2.0% of EV = 0.02 * 1440 = $28.8m, paid at close from equity. Total leverage at close = 5.5x EBITDA.Read the full answer