Mini LBO Underwrite
You are underwriting a 5-year LBO for a private equity investment committee. Company (fictional): HarborTech Services (HTS) –…
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
HarborTech Services (HTS) – 5-Year LBO Summary 1) Year-by-Year Cash Flow Table (FY2026 – FY2030) Assumptions Recap: Revenue growth: 8%, 7%, 6%, 5%, 5% EBITDA margin: 14.0%, 15.0%, 16.0%, 16.5%, 17.0% Capex = 3.0% of revenue ΔNWC = 0.5% of revenue growth Tax = 25% × (EBITDA - Cash Interest) Debt: Term Loan: 4.0x EBITDA…Read the full answer