Scribd
Upload
137 views

M&a Assignment Case

The document provides financial details regarding the acquisition of a company, including sources and uses of funds, purchase multiples, asset valuations, projections, and debt repayment schedules. The main sources of funds for the $69 million acquisition are a $34.6 million asset-based loan at 85% LTV, $10.35 million sellers note, $9.04 million mezzanine financing, and $15 million from equity. Projections show revenues growing at 15% annually through 2017 with EBITDA multiples of 4.3-7.8x on exit. The acquisition is financed with a combination of debt and equity that is projected to generate returns of 21-40% for the private equity firm.

Uploaded by

Dante P. Ch
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
137 views

M&a Assignment Case

The document provides financial details regarding the acquisition of a company, including sources and uses of funds, purchase multiples, asset valuations, projections, and debt repayment schedules. The main sources of funds for the $69 million acquisition are a $34.6 million asset-based loan at 85% LTV, $10.35 million sellers note, $9.04 million mezzanine financing, and $15 million from equity. Projections show revenues growing at 15% annually through 2017 with EBITDA multiples of 4.3-7.8x on exit. The acquisition is financed with a combination of debt and equity that is projected to generate returns of 21-40% for the private equity firm.

Uploaded by

Dante P. Ch
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 11

All values in 000's

Sources of Funds

Access to capital from Equity


Asset based Loan
Sellers Note
Mezzanine
Total

Capital composition % of Bid Price


15,000
22%
34,611
50%
10,350
15%
9,039
13%
69,000

2013 Purchase Multiples


Enterprise Value/EBITDA
Enterprise Value/EBIT
Enterprise Value/Revenues

4.3x
4.7x
0.7x

Calculation of Asset Based Loan


2012 (A)

A/R
Inventory
Net Fixed Assets

Enterprise Value/EBITDA
IRR for PE Firm

Book Value
10,610
9,421
12,979

FMV
10,610
9,421
25,958

Exit Multiple Sensitivity Table


Rollover to another Sell to Strategic Buyer
Financial Buyer
(conservative Case)
4.3x
5.6x
21%
29%

2013
(60,000)
(60,000)

2014
0
0

(60,000)

Uses of Funds
Interest rate
Bid Price
Growth capital Cushion
Refinancing of current Debt
Total

10%
5%
14%

d Loan

Loan to value ratio


@85%
@65%
@75%
Total 1

Loan Value
9,019
6,124
19,469
34,611

Sell to Strategic Buyer


(best Case)
7.8x
40%

2015
0
0

2016
0
0

2017
127,716
166,031

Amount
60,000
5,000
4,000
69,000

231,540

% of Total
87%
7%
6%

Historical and Expected Income Statements ($000s)


Historical
2011(A)

Total revenues
% Growth

COGS
% of Sales

Projections

2012(A)

2013(P)

2014(P)

2015(P)

$66,458

$82,833

$97,329

$111,929

$128,718

NA

24.6%

17.5%

15.0%

15.0%

45,472

56,378

67,033

76,198

86,978

68.4%

68.1%

68.9%

68.1%

67.6%

20,986

26,455

30,296

35,731

41,740

31.6%

31.9%

31.1%

31.9%

32.4%

14,761

17,482

16,186

18,305

20,916

22%

21%

17%

16%

16%

6,225
(2,415)
(1,051)
$9,691

8,973
(2,363)
(1,385)
$12,721

14,110
0
0
$14,110

17,426
0
0
$17,426

20,824
0
0
$20,824

14.6%

15.4%

14.5%

15.6%

16.2%

EBIAT
Addback Depreciation
+/- Change in WC
- CapEX
Cash Flows

9,172
1,052
(1,320)
(1,300)
7,604

11,327
1,158
(726)
(1,300)
10,459

13,536
1,273
(762)
(1,300)
12,747

Total Principal
Total Interest

5,334
5,022

5,853
4,504

6,429
3,927

Coverage Statistics
EBIT/ (Principal + Interest)
Cash Flow / (Principal + Interest)
EBITDA / (Total Interest)

1.4x
0.7x
3.0x

1.7x
1.0x
4.1x

2.0x
1.2x
5.6x

Leverage Statistics
Total Debt / EBITDA

0.7x

0.6x

0.5x

Total gross profit


% Margin

SG&A
% of Sales

Operating income
Restate for Baloleum
Other restatements
Adjusted EBIT
% Margin EBIT

Returns
ROE

Extra cash Flow needed for 2:1


with Cashflow

27.7%

3,065

35.6%

37.0%

1,246

112

EBIAT
Interest
Net Income

9,172
5,022
4,149

11,327
4,504
6,823

13,536
3,927
9,608

Asset Based Loan (120 Months)


1
Principal
$34,611
Interest rate (monthly)
0.83%
Monthly Payment for Amortization $457
Interest payment
$288
Reduction to Principle
$169

2
$34,442

3
$34,271

4
$34,100

5
$33,926

$457
$287
$170

$457
$286
$172

$457
$284
$173

$457
$283
$175

Year 1
$3,366
$2,123
$5,489

Year 2
$3,143
$2,345
$5,489

Year 3
$2,898
$2,591
$5,489

Year 4
$2,626
$2,862
$5,489

Year 5
$2,327
$3,162
$5,489

2
$8,934

3
$8,828

4
$8,721

5
$8,612

$210
$104
$106

$210
$103
$107

$210
$102
$109

$210
$100
$110

Year 1
$1,182
$1,342
$2,524

Year 2
$981
$1,543
$2,524

Year 3
$751
$1,773
$2,524

Year 4
$486
$2,038
$2,524

Year 5
$181
$2,343
$2,524

1
Principal
$10,350
Interest rate (monthly)
0.42%
Monthly Payment for Amortization $195

2
$10,198

3
$10,045

4
$9,892

5
$9,737

$195

$195

$195

$195

Total Interest
Total Principal
Principal + Interest

Mezzanine Loan (60 Months, without PIK)


1
Principal
$9,039
Interest rate (monthly)
1.17%
Monthly Payment for Amortization $210
Interest payment
$105
Reduction to Principle
$105

Total Interest
Total Principal
Principal + Interest

Sellers note (60 Months)

Interest payment
Reduction to Principle

$43
$152

$42
$153

$42
$153

$41
$154

$41
$155

Total Interest
Total Principal
Principal + Interest

Year 1
$475
$1,869
$2,344

Year 2
$379
$1,964
$2,344

Year 3
$279
$2,065
$2,344

Year 4
$173
$2,170
$2,344

Year 5
$62
$2,282
$2,344

TOTAL P+I

$10,356

$10,356

$10,356

$10,356

$10,356

Option

Projections
2016(P)

2017(P)

$148,026

$170,229

15.0%

15.0%

99,494

114,502

67.2%

67.3%

48,532

55,727

32.8%

32.7%

23,959

27,491

16%

16%

24,573
0
0
$24,573

28,236
0
0
$28,236

16.6%

16.6%

15,972
1,401
(800)
(1,300)
15,273

18,353
1,541
(840)
(1,300)
17,754

7,071
3,285

7,786
2,570

2.4x
1.5x
7.9x

2.7x
1.7x
11.6x

0.4x

0.3x

35.7%

32.7%

(1,132)

(2,182)

15,972
3,285
12,687

18,353
2,570
15,783

6
$33,752

7
$33,576

8
$33,398

9
$33,219

118
$1,350

119
$903

120
$454

$457
$281
$176

$457
$280
$178

$457
$278
$179

$457
$277
$181

$457
$11
$446

$457
$8
$450

$457
$4
$454

6
$8,503

7
$8,391

8
$8,279

9
$8,165

$210
$99
$111

$210
$98
$112

$210
$97
$114

$210
$95
$115

6
$9,583

7
$9,427

8
$9,271

9
$9,115

$195

$195

$195

$195

End
($0)

$40
$155

$39
$156

$39
$157

$38
$157

You might also like