Financial Model

Company Name
Valuation & Leveraged Buyout Analysis
February 4, 2020

Cells with blue text are input cells

Cells with green text have been imported from another sheet
Cells with black text are formulas
Instructions
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

1. Input historical financial information in the Model sheet

The Model sheet includes three years of historical performance, which is used to help you compare with the expected future performance in the financial projections.
The Model sheet's income statement and cash flow statement can include up to the past three years of information, but this sheet only requires the company's current balance sheet.

2. Fill out all input cells in the Assumptions sheet

The Assumptions sheet is the sheet that contains all investment-specific data and information, identified by being the blue-text input cells.
The General assumptions include cases, which are used to run different scenarios of the same investment.
If you do not require different cases to be run, simply set the case assumption to "1" and then only focus on Case 1's assumptions (top rows).
The Sources & Uses assumptions focus on how the company will be purchased, and what the funds are being used for; the main focuses here is amount of each source and debt terms.
The Income Statement assumptions import metrics from the Model sheet, which help you forecast the financial projections.
The Balance Sheet assumptions only import one year of metrics from the Model sheet, because the Model only has one year of information (the current year).
The Debt Schedule assumptions focus on the Libor rate, which is the baseline for debt spreads (i.e., debt interest rates are expressed as 'Libor plus some additional percentage').
Once you have completed the Model sheet and Assumption sheet inputs, your operating forecast is complete.

3. Review Model sheet and calculations

The Model sheet calculates the investment's performance, all based on the inputs described above.
The Balance Sheet here includes a pre-investment version ("O/B" for Opening Balance), any changes made upon investment, and a post-investment version ("E/B" for ending balance").
The Model sheet should be reviewed periodically to ensure that it is forecasting what was expected, given the inputted information.

4. Fill out all input cells in the Valuation sheet

The Valuation sheet focuses on the three standard methods for valuing a company (DCF, Comparables, and Precedents) and is used to determine an approach purchase price.
If the company's purchase price (what the seller is asking for) is already known, then the Valuation sheet is not necessary, but can still be used if desired.
The Football Field chart accurately summarizes the sheet's end results; the inputs here (valuation multiples) are user-inputted, but should reflect the valuation methods below.
The Football Field chart's Leveraged Buyout valuation is the most difficult to determine, as you need to adjust the multiples on the Summary & Returns sheet to reach the IRRs.
Many of the Discounted Cash Flow inputs should reflect the Comparable Companies' information; for example, the company's cost of debt should likely be the same as its comparables.
All Comparable Company information can be calculated manually used company information, or by using a paid source (e.g., Capital IQ).
Precedent Transaction information can be found on online news sources, or by using a paid source.

5. Fill out the inputs cells in the Summary & Returns sheet

The Summary & Returns sheet only has inputs for the sensitivity tables, seen in blue text near the bottom of the page.
The Summary & Returns sheet displays a summary of the entire workbook, and calculates the LBO's returns (e.g., the returns the purchased company would produce).
The Summary & Returns sheet should provide all the necessary information needed to make quality investment decisions.

6. Review Summary & Returns sheet

The Summary & Returns sheet displays a summary of the entire workbook, and calculates the LBO's returns (e.g., the returns the purchased company would produce).
The Summary & Returns sheet should be reviewed periodically to ensure that it is forecasting what was expected, given the inputted information.
Summary & Returns
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Sources & Uses

Sources Cash Rate Multiple of EBITDA Amount Uses Multiple of EBITDA Amount
Revolving Credit Facility L+2.5% 1.0x $30.0 Purchase Price 9.0x $260.1
Term Loan A L+3.5% 3.0x $86.7 Financing Fees 0.5x $15.0
Term Loan B L+4.0% 2.0x $57.8 Other Fees (1) 0.3x $10.0
Mezzanine Loan 6.0% 1.0x $28.9 Other Fees (2) - -
Management Rollover 0.3x $10.0 Other Fees (3) - -
Cash on Hand 0.8x $22.0 Other Fees (4) - -
Common Equity 1.9x $54.7 Other Fees (5) 0.2x $5.0
Total 10.0x $290.1 Total 10.0x $290.1

Key Metrics

Transaction Multiples 2020 2021 2022 Average Debt Multiples 2021 2022 2023 Average
EV / EBIT 14.6x 22.9x 20.1x 19.2x Total Debt / EBITDA 7.4x 7.5x 7.4x 7.5x
EV / EBITDA 10.0x 10.5x 9.4x 10.0x EBITDA / Cash Interest 2.2x 2.4x 2.7x 2.4x
EV / (EBITDA - Capex) 14.6x 18.5x 16.7x 16.6x (EBITDA - Capex) / Cash Interest 1.3x 1.3x 1.6x 1.4x
Equity / Earnings 3.9x (65.0x) 270.7x 137.3x DSCR (EBITDA / Debt Service) 1.6x 1.7x 2.0x 1.8x

Operating Model
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Revenue $170.1 $192.8 $213.6 $229.0 $237.2 $243.2 $248.8 $254.2 $259.3 $264.4
Growth 13.4% 10.8% 7.2% 3.6% 2.5% 2.3% 2.2% 2.0% 2.0%

Gross Profit $85.6 $96.6 $106.3 $113.4 $117.0 $119.8 $122.4 $125.0 $127.4 $129.9
Margin 50.3% 50.1% 49.8% 49.5% 49.3% 49.2% 49.2% 49.2% 49.1% 49.1%

EBITDA $27.6 $30.9 $35.8 $40.2 $41.3 $41.9 $42.5 $43.1 $43.7 $44.2
Margin 16.2% 16.0% 16.8% 17.6% 17.4% 17.2% 17.1% 17.0% 16.8% 16.7%
Growth (4.5%) 12.0% 15.8% 12.3% 2.8% 1.5% 1.4% 1.3% 1.3% 1.3%

Interest Expenses ($12.5) ($12.9) ($13.1) ($13.2) ($13.2) ($12.8) ($12.4) ($12.0) ($11.6) ($11.2)
Taxes - ($0.1) ($0.7) ($1.3) ($1.4) ($2.1) ($2.3) ($2.4) ($2.5) ($2.6)
Changes in Net Working Capital ($13.6) ($4.7) ($4.4) ($3.3) ($1.8) ($1.3) ($1.2) ($1.1) ($1.0) ($1.1)
Capital Expenditures ($11.9) ($13.5) ($15.0) ($16.0) ($16.6) ($17.0) ($17.4) ($17.8) ($18.1) ($18.5)
Free Cash Flow ($10.4) ($0.2) $2.69 $6.38 $8.30 $8.74 $9.27 $9.82 $10.38 $10.84
Margin (6.1%) (0.1%) 1.3% 2.8% 3.5% 3.6% 3.7% 3.9% 4.0% 4.1%

Debt Drawdown (Repayment) $10.4 $0.2 ($2.7) ($6.4) ($8.3) ($8.7) ($9.3) ($9.8) ($10.4) ($10.8)
Net Cash Flow - - - - - - - - - -

Returns Forecast
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Net Debt ($214.9) ($216.4) ($214.9) ($209.8) ($202.9) ($195.6) ($187.8) ($179.5) ($170.7) ($161.5)
Valuation on Sale 9.0x $248.3 $278.2 $322.2 $361.8 $371.8 $377.5 $382.9 $388.1 $392.9 $397.9
Equity Value ($64.7) $33.4 $61.9 $107.3 $152.0 $168.9 $181.9 $195.1 $208.6 $222.3 $236.4

Management Equity ($10.0) $5.2 $9.6 $16.6 $23.5 $26.1 $28.1 $30.2 $32.2 $34.4 $36.5
Investor Equity Value ($54.7) $28.2 $52.3 $90.7 $128.5 $142.8 $153.8 $165.0 $176.4 $187.9 $199.9

Returns By Year
Exit Year IRR MoIC May 2020 May 2021 May 2022 May 2023 May 2024 May 2025 May 2026 May 2027 May 2028 May 2029 May 2030

2021 (48.4%) 0.5x ($54.7) $28.2

2022 (2.2%) 1.0x ($54.7) - $52.3
2023 18.4% 1.7x ($54.7) - - $90.7
2024 23.8% 2.3x ($54.7) - - - $128.5
2025 21.1% 2.6x ($54.7) - - - - $142.8
2026 18.8% 2.8x ($54.7) - - - - - $153.8
2027 17.1% 3.0x ($54.7) - - - - - - $165.0
2028 15.7% 3.2x ($54.7) - - - - - - - $176.4
2029 14.7% 3.4x ($54.7) - - - - - - - - $187.9
2030 13.8% 3.7x ($54.7) - - - - - - - - - $199.9

Returns Sensitivity

Entry Multiple vs Exit Multiple (Assuming 5 Year Hold) Exit Multiple vs Exit Year

Exit 2025 Exit Multiple

21.1% 7.0x 8.0x 9.0x 10.0x 11.0x 21.1% 7.0x 8.0x 9.0x 10.0x 11.0x
7.0x 2023
8.0x 2024
Entry 9.0x Exit Year 2025
10.0x 2026
11.0x 2027

Exit Exit Multiple

261.1% 7.0x 8.0x 9.0x 10.0x 11.0x 261.1% 7.0x 8.0x 9.0x 10.0x 11.0x
7.0x 2023
8.0x 2024
Entry 9.0x Exit Year 2025
10.0x 2026
11.0x 2027
Output Charts
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Revenue Growth & EBITDA Margin (Five Years) Valuation Football Field

Revenue EBITDA Margin $500.0

$450.0
$250.0 18.0% $400.0
$350.0
17.5% $300.0
$200.0
$250.0
17.0% $200.0
$150.0 $150.0
16.5% $100.0
$100.0 $50.0
16.0% -
Comparable Precendent Discounted Leveraged
$50.0 Companies Transactions Cash Flow Buyout
15.5% Returns
8.9x - 12.9x 8.1x - 13.1x 5.1% - 7.1% 20.0% - 25.0%
- 15.0% EV / EBITDA EV / EBITDA WACC IRR
2021 2022 2023 2024 2025

Interest Coverage Ratio (Five Years) Sources & Uses

Sources Uses
3.1x 3.1x
Revolver 10.3% Revolving Cred $30.0 -
2.7x Term Loans 49.8% Term Loan A $86.7 -
Mezzanine L 10.0% Term Loan B $57.8 -
2.4x
2.2x Cash on Han 7.6% Mezzanine L $28.9 -
Equity 22.3% Management $10.0 -
Purchase Price 89.7% Cash on Han $22.0 -
Fees 10.3% Common Equi $54.7 -
Purchase Pri - $260.1
Financing Fe - $15.0
Other Fees (1 - $10.0
Other Fees (2 - -
Other Fees (3 - -
Other Fees (4 - -
2021 2022 2023 2024 2025 Sources Other Fees (5 - Uses $5.0

Revenue Mix Gross Margin Contribution

- Product 1 4 ProductProduct
Product 2 Product
3 3 Product
Product 42 -
Product 1 $140.0 Product 1 Product 2 Product 3 Product 4 -
2021 $91.3 $48.3 $21.8 $8.7 - 2021 $58.9 $15.7 $8.7 $2.2 -
2022 $101.2 $55.6 $27.2 $8.9 - $120.02022 $65.4 $18.1 $10.9 $2.3 -
2023 $109.2 $62.8 $32.6 $9.0 - 2023 $70.5 $20.4 $13.1 $2.3 -
$100.0
2024 $114.5 $67.8 $37.5 $9.1 - 2024 $74.0 $22.0 $15.0 $2.3 -
2025 $116.8 $69.9 $41.3 $9.3 - $80.02025 $75.4 $22.7 $16.5 $2.4 -
2026 $119.2 $71.2 $43.3 $9.4 - 2026 $76.9 $23.2 $17.3 $2.4 -
2027 $121.6 $72.7 $45.1 $9.5 - $60.02027 $78.3 $23.6 $18.0 $2.4 -
2028 $124.0 $74.1 $46.4 $9.7 - $40.02028 $79.8 $24.1 $18.6 $2.5 -
2029 $126.5 $75.6 $47.3 $9.8 - 2029 $81.4 $24.6 $18.9 $2.5 -
2030 $129.0 $77.1 $48.3 $10.0 - $20.02030 $82.9 $25.1 $19.3 $2.5 -

-
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Product 1 Product 2 Product 3 Product 4 -

Revenue to EBITDA Bridge (First Year)

Revenue $170.1
This chart isn't available in your version of Excel.
COGS ($84.5)
EditingProfit
Gross this shape or saving
$85.6this workbook into a different file format will permanently break the chart.
Marketing ($5.1)
Administratio ($13.8)
R&D ($2.2)
Rent ($28.1)
Other Operat ($8.8)
EBITDA $27.6
Output Charts
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x
Output Charts
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Revenue to EBITDA Bridge (Last Year)

Revenue $264.4
This chart isn't available in your version of Excel.
COGS ($134.5)
Editing this
Gross Profit shape or $129.9this workbook into a different file format will permanently break the chart.
saving
Marketing ($2.6)
Administratio ($22.2)
R&D ($3.4)
Rent ($43.6)
Other Operat ($13.7)
EBITDA $44.2

Value Creation Bridge (Five Years)

Base Equity
This chart $54.7
isn't available in your version1.0x
of Excel.
Transaction ($30.0) (0.5x)
Editing this
RevenueMargin
EBITDA shape
Gro or saving
$158.5 this workbook
2.9xinto a different file format will permanently break the chart.
Improvement ($46.7) (0.9x)
Debt Paydow $22.5 0.4x
Excess Cash
Management - -
Rollover
Multiple Expansion($16.1) (0.3x)
(Contraction) - -
Equity at Exit 2.6x
Output Charts
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Value Creation Bridge (Ten Years)

Base Equity
This chart $54.7
isn't available in your version1.0x
of Excel.
Transaction ($30.0) (0.5x)
Editing this
RevenueMargin
EBITDA shape
Gro or saving
$206.4 this workbook
3.8xinto a different file format will permanently break the chart.
Improvement ($68.6) (1.3x)
Debt Paydow $63.9 1.2x
Excess Cash
Management - -
Multiple Expansion($26.5)
Rollover (0.5x)
(Contraction) - -
Equity at Exit 3.7x
Valuation
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Football Field

$600.0

$500.0

$400.0

$300.0

$200.0

$100.0

-
Comparable Companies Comparable Companies Precendent Transactions Discounted Cash Flow Leveraged Buyout Returns
11.6x - 16.6x P / E 8.9x - 12.9x EV / EBITDA 8.1x - 13.1x EV / EBITDA 5.1% - 7.1% WACC 20.0% - 25.0% IRR

EBITDA $28.9

Category Subtitle Max Min Average Min Max

11.6x - 16.6x P / E Comparable Companies $479.7 $335.2 $348.0 11.6x 16.6x
8.9x - 12.9x EV / EBITDA Comparable Companies $372.8 $257.2 $348.0 8.9x 12.9x
8.1x - 13.1x EV / EBITDA Precendent Transactions $378.6 $234.1 $348.0 8.1x 13.1x
5.1% - 7.1% WACC Discounted Cash Flow $403.1 $261.7 $348.0 5.1% 7.1%
20.0% - 25.0% IRR Leveraged Buyout Returns $438.2 $319.7 $348.0 11.1x 15.2x

Discounted Cash Flows

FCF Forecast 2021 2022 2023 2024 2025 WACC Build

Revenue $170.1 $192.8 $213.6 $229.0 $237.2 Cost of Debt 5.5%

Tax Rate 17.7%
Gross Profit $85.6 $96.6 $106.3 $113.4 $117.0 After-Tax Cost of Debt 4.6%

EBITDA $27.6 $30.9 $35.8 $40.2 $41.3 Risk Free Rate 1.7%
Historical Market Return 7.0%
D&A ($11.9) ($13.5) ($15.0) ($16.0) ($16.6) Market Risk Premium 5.3%
EBIT $15.7 $17.4 $20.8 $24.2 $24.7
Avg. Comps Beta (Unlevered) 0.9
Income Tax ($2.8) ($3.1) ($3.7) ($4.3) ($4.4) Cost of Equity 6.6%
NOPAT $12.9 $14.3 $17.2 $19.9 $20.3
Target Debt-to-EV 24.1%
D&A $11.9 $13.5 $15.0 $16.0 $16.6 Target Equity-to-EV 75.9%
Change in Net Working Capital ($13.6) ($4.7) ($4.4) ($3.3) ($1.8) WACC 6.1%
Capital Expenditures ($11.9) ($13.5) ($15.0) ($16.0) ($16.6)
Free Cash Flow ($0.6) $9.7 $12.8 $16.6 $18.5 Valuation

Sensitivity: Pre-Tax Cost of Debt vs Target Debt-to-EV Sensitivity: WACC WACC 6.1%
Present Value of Future Cash Flows $45.6
Pre-Tax Cost of Debt WACC vs EV
$318.5 3.5% 4.5% 5.5% 6.5% 7.5% $318.5 Terminal Year FCF $18.5
14.1% 4.1% Long-Term Growth Rate 1.0%
19.1% 5.1% Terminal Value $366.9
Debt-to-EV 24.1% 6.1%
29.1% 7.1% Present Value of Terminal Value $272.9
34.1% 8.1% Total Enterprise Value $318.5

Comparables Levered Beta D/E Tax Rate Unlevered Beta Interest Expense Long-Term Debt Cost of Debt
Company Name 1 1.3 24.7% 8.4% 1.0 $1.5 $29.6 5.1%
Company Name 2 NA NA NA NA $1.1 $19.8 5.5%
Company Name 3 1.3 19.0% 20.0% 1.1 $0.9 $12.4 7.2%
Company Name 4 0.9 34.0% 22.6% 0.7 $0.1 $0.8 11.3%
Company Name 5 1.4 54.8% 23.3% 1.0 $0.0 $2.0 2.0%
Company Name 6 1.1 46.0% 19.7% 0.8 $1.0 $15.1 6.3%
Company Name 7 1.0 11.7% 12.0% 0.9 $0.0 $1.0 1.4%
- - - - - - - NA
- - - - - - - NA
- - - - - - - NA
Average 31.7% 17.7% 0.9 5.5%
Valuation
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Comparable Companies
EV / EBITDA (LTM) EV / EBITDA (NTM) P / E (LTM) 3-Year Rev. CAGR 3-Year EBITDA CAGR EBITDA Margin
Company Name 1 8.9x 16.9x 10.7x 13.2% 8.2% 33.2%
Company Name 2 9.0x 11.3x 16.7x 15.5% 15.2% 19.0%
Company Name 3 10.9x 9.7x 13.9x 17.4% 18.5% 25.2%
Company Name 4 11.6x 8.9x 13.5x 9.4% 9.8% 12.4%
Company Name 5 12.8x 8.1x 13.3x 15.8% 16.7% 23.6%
Company Name 6 15.9x 7.8x 18.1x 6.6% 9.6% 23.3%
Company Name 7 7.2x 6.9x 12.6x 9.5% 15.9% 41.6%
- - - - - - -
- - - - - - -
- - - - - - -
High 15.9x 16.9x 18.1x 17.4% 18.5% 41.6%
Mean 10.9x 9.9x 14.1x 12.5% 13.4% 25.5%
Low 7.2x 6.9x 10.7x 6.6% 8.2% 12.4%

Company Name 9.0x 9.4x 3.9x 16.2% 20.2% 19.6%

Precedent Transactions
Target Name Acquirer Name Geography Date Enterprise Value EBITDA Multiple
Company Name 1 Company Name 2 USA Jan 2020 $950.0 13.6x
Company Name 3 Company Name 4 USA Oct 2019 $625.0 10.4x
Company Name 5 Company Name 6 United Kingdom Apr 2019 $800.0 12.7x
Company Name 7 Company Name 8 China Mar 2019 $750.0 8.1x
Company Name 9 Company Name 10 USA Sep 2018 $600.0 10.9x
High 13.6x
Mean 11.1x
Low 8.1x

Company Name 9.0x

Model
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Income Statement
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Product 1 $61.7 $70.4 $80.1 $91.3 $101.2 $109.2 $114.5 $116.8 $119.2 $121.6 $124.0 $126.5 $129.0
Growth 13.9% 13.9% 13.9% 10.9% 7.9% 4.9% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

Product 2 $29.5 $34.9 $41.3 $48.3 $55.6 $62.8 $67.8 $69.9 $71.2 $72.7 $74.1 $75.6 $77.1
Growth 18.3% 18.3% 17.0% 15.0% 13.0% 8.0% 3.0% 2.0% 2.0% 2.0% 2.0% 2.0%

Product 3 $9.7 $11.1 $17.4 $21.8 $27.2 $32.6 $37.5 $41.3 $43.3 $45.1 $46.4 $47.3 $48.3
Growth 14.4% 56.8% 25.0% 25.0% 20.0% 15.0% 10.0% 5.0% 4.0% 3.0% 2.0% 2.0%

Product 4 $8.3 $8.4 $8.6 $8.7 $8.9 $9.0 $9.1 $9.3 $9.4 $9.5 $9.7 $9.8 $10.0
Growth 1.2% 2.4% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%

- - - - - - - - - - - - - -
Growth - - - - - - - - - - - -

Revenue $109.2 $124.8 $147.4 $170.1 $192.8 $213.6 $229.0 $237.2 $243.2 $248.8 $254.2 $259.3 $264.4
Growth 14.2% 18.2% 15.4% 13.4% 10.8% 7.2% 3.6% 2.5% 2.3% 2.2% 2.0% 2.0%

COGS ($56.5) ($65.0) ($76.7) ($84.5) ($96.2) ($107.3) ($115.6) ($120.2) ($123.4) ($126.4) ($129.2) ($131.9) ($134.5)

Product 1 $39.4 $43.4 $47.9 $58.9 $65.4 $70.5 $74.0 $75.4 $76.9 $78.3 $79.8 $81.4 $82.9
Gross Margin 63.8% 61.7% 59.8% 64.6% 64.6% 64.6% 64.6% 64.6% 64.5% 64.5% 64.4% 64.4% 64.3%

Product 2 $9.8 $10.7 $13.9 $15.7 $18.1 $20.4 $22.0 $22.7 $23.2 $23.6 $24.1 $24.6 $25.1
Gross Margin 33.2% 30.7% 33.7% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5%

Product 3 $1.4 $3.5 $6.7 $8.7 $10.9 $13.1 $15.0 $16.5 $17.3 $18.0 $18.6 $18.9 $19.3
Gross Margin 14.4% 31.5% 38.5% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0%

Product 4 $2.1 $2.2 $2.2 $2.2 $2.3 $2.3 $2.3 $2.4 $2.4 $2.4 $2.5 $2.5 $2.5
Gross Margin 25.3% 25.6% 25.6% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5%

- - - - - - - - - - - - - -
Gross Margin - - - - - - - - - - - - -

Gross Profit $52.7 $59.8 $70.7 $85.6 $96.6 $106.3 $113.4 $117.0 $119.8 $122.4 $125.0 $127.4 $129.9
Margin 48.2% 47.9% 48.0% 50.3% 50.1% 49.8% 49.5% 49.3% 49.2% 49.2% 49.2% 49.1% 49.1%
Growth 13.4% 18.3% 21.0% 12.8% 10.1% 6.7% 3.2% 2.4% 2.2% 2.1% 1.9% 1.9%

Marketing ($1.0) ($1.2) ($1.3) ($5.1) ($5.8) ($4.3) ($2.3) ($2.4) ($2.4) ($2.5) ($2.5) ($2.6) ($2.6)
% of Revenue 0.9% 0.9% 0.9% 3.0% 3.0% 2.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%

Administration ($8.5) ($9.3) ($9.8) ($13.8) ($15.5) ($17.1) ($18.2) ($18.7) ($19.5) ($20.2) ($20.8) ($21.5) ($22.2)
% of Revenue 7.8% 7.5% 6.6% 8.1% 8.1% 8.0% 8.0% 7.9% 8.0% 8.1% 8.2% 8.3% 8.4%

R&D ($1.2) ($1.9) ($1.4) ($2.2) ($2.5) ($2.8) ($3.0) ($3.1) ($3.2) ($3.2) ($3.3) ($3.4) ($3.4)
% of Revenue 1.1% 1.5% 0.9% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3%

Rent ($17.0) ($19.2) ($22.3) ($28.1) ($31.8) ($35.2) ($37.8) ($39.1) ($40.1) ($41.1) ($41.9) ($42.8) ($43.6)
% of Revenue 15.6% 15.4% 15.1% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5%

Other Operating Costs ($5.0) ($6.0) ($7.0) ($8.8) ($10.0) ($11.1) ($11.9) ($12.3) ($12.6) ($12.9) ($13.2) ($13.5) ($13.7)
% of Revenue 4.6% 4.8% 4.7% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%

EBITDA $20.0 $22.2 $28.9 $27.6 $30.9 $35.8 $40.2 $41.3 $41.9 $42.5 $43.1 $43.7 $44.2
EBITDA Margin 18.3% 17.8% 19.6% 16.2% 16.0% 16.8% 17.6% 17.4% 17.2% 17.1% 17.0% 16.8% 16.7%
Growth 11.0% 30.2% (4.5%) 12.0% 15.8% 12.3% 2.8% 1.5% 1.4% 1.3% 1.3% 1.3%

D&A ($6.0) ($8.0) ($9.0) ($11.9) ($13.5) ($15.0) ($16.0) ($16.6) ($17.0) ($17.4) ($17.8) ($18.1) ($18.5)
% of Revenue 5.5% 6.4% 6.1% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%

Financing Fees Amortization ($3.0) ($3.0) ($3.0) ($3.0) ($3.0) - - - - -

EBIT $14.0 $14.2 $19.9 $12.7 $14.4 $17.8 $21.2 $21.7 $24.9 $25.1 $25.3 $25.5 $25.7

Commitment Fee on Revolving Credit Facility - $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.0 $0.0 ($0.0)
Interest on Revolving Credit Facility ($0.8) ($1.1) ($1.3) ($1.3) ($1.3) ($1.2) ($1.1) ($1.0) ($0.9) ($0.7)
Interest on Term Loan A ($5.9) ($5.8) ($5.7) ($5.5) ($5.4) ($5.0) ($4.7) ($4.4) ($4.0) ($3.7)
Interest on Term Loan B ($4.2) ($4.3) ($4.4) ($4.5) ($4.6) ($4.5) ($4.5) ($4.4) ($4.4) ($4.3)
PIK Interest on Mezzanine Loan ($1.2) ($1.2) ($1.3) ($1.3) ($1.4) ($1.4) ($1.5) ($1.5) ($1.6) ($1.6)
Cash Interest on Mezzanine Loan ($1.7) ($1.8) ($1.9) ($2.0) ($2.0) ($2.1) ($2.2) ($2.3) ($2.4) ($2.5)
Earnings Before Tax $14.0 $14.2 $19.9 ($1.0) $0.3 $3.5 $6.7 $7.2 $10.7 $11.3 $11.8 $12.3 $12.8
Cash Interest Coverage Ratio 2.2x 2.4x 2.7x 3.1x 3.1x 3.3x 3.4x 3.6x 3.8x 3.9x

Income Tax ($2.7) ($3.1) ($3.5) - ($0.1) ($0.7) ($1.3) ($1.4) ($2.1) ($2.3) ($2.4) ($2.5) ($2.6)
% of Earnings Before Tax 19.5% 21.8% 17.6% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%

Net Income $11.3 $11.1 $16.4 ($1.0) $0.2 $2.8 $5.4 $5.8 $8.6 $9.0 $9.4 $9.8 $10.3
Margin 10.3% 8.9% 11.1% (0.6%) 0.1% 1.3% 2.3% 2.4% 3.5% 3.6% 3.7% 3.8% 3.9%
Growth (1.6%) 47.8% (106.1%) (124.0%) 1,076.8% 90.7% 7.4% 49.0% 4.9% 4.6% 4.4% 4.3%

Cash Flow Statement

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Net Income ($1.0) $0.2 $2.8 $5.4 $5.8 $8.6 $9.0 $9.4 $9.8 $10.3

D&A $11.9 $13.5 $15.0 $16.0 $16.6 $17.0 $17.4 $17.8 $18.1 $18.5
Financing Fees Amortization $3.0 $3.0 $3.0 $3.0 $3.0 - - - - -
PIK Interest on Mezzanine Loan $1.2 $1.2 $1.3 $1.3 $1.4 $1.4 $1.5 $1.5 $1.6 $1.6
Change in AR ($7.3) ($4.7) ($4.3) ($3.2) ($1.7) ($1.2) ($1.2) ($1.1) ($1.0) ($1.1)
Change in Inventory ($13.0) ($4.3) ($4.1) ($3.1) ($1.7) ($1.2) ($1.1) ($1.0) ($1.0) ($1.0)
Change in Other Current Assets ($2.6) ($1.7) ($1.5) ($1.1) ($0.6) ($0.4) ($0.4) ($0.4) ($0.4) ($0.4)
Change in AP $7.8 $5.1 $4.6 $3.4 $1.8 $1.3 $1.3 $1.2 $1.1 $1.1
Change in Other Current Liabilities $1.6 $1.0 $0.9 $0.7 $0.4 $0.3 $0.3 $0.2 $0.2 $0.2
Cash Flow From Operations $1.5 $13.3 $17.6 $22.4 $24.9 $25.8 $26.7 $27.6 $28.5 $29.4

Capital Expenditures ($6.0) ($8.0) ($9.0) ($11.9) ($13.5) ($15.0) ($16.0) ($16.6) ($17.0) ($17.4) ($17.8) ($18.1) ($18.5)
% of Revenue 5.5% 6.4% 6.1% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%

Cash Flow From Investing ($11.9) ($13.5) ($15.0) ($16.0) ($16.6) ($17.0) ($17.4) ($17.8) ($18.1) ($18.5)

Free Cash Flow ($10.4) ($0.2) $2.7 $6.4 $8.3 $8.7 $9.3 $9.8 $10.4 $10.8
Margin (6.1%) (0.1%) 1.3% 2.8% 3.5% 3.6% 3.7% 3.9% 4.0% 4.1%
Growth - (97.9%) (1,317.3%) 137.2% 30.2% 5.2% 6.1% 5.9% 5.7% 4.4%

Revolving Credit Facility $15.3 $5.1 $2.2 ($1.5) ($3.4) ($3.8) ($4.4) ($4.9) ($5.5) ($5.9)
Term Loan A ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3)
Term Loan B ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6)
Mezzanine Loan - - - - - - - - - -
Cash Flow From Financing $10.4 $0.2 ($2.7) ($6.4) ($8.3) ($8.7) ($9.3) ($9.8) ($10.4) ($10.8)

Net Cash Flow - $0.0 ($0.0) - $0.0 - $0.0 - - -

Beginning Cash Balance - - $0.0 ($0.0) ($0.0) ($0.0) ($0.0) $0.0 $0.0 $0.0
Model
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Net Cash Flow - $0.0 ($0.0) - $0.0 - $0.0 - - -

Ending Cash Balance - $0.0 ($0.0) ($0.0) ($0.0) ($0.0) $0.0 $0.0 $0.0 $0.0
Model
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Balance Sheet
O/B 2020 Change E/B 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cash $22.0 ($22.0) - - $0.0 ($0.0) ($0.0) ($0.0) ($0.0) $0.0 $0.0 $0.0 $0.0
AR $28.0 $28.0 $35.3 $40.0 $44.3 $47.5 $49.2 $50.4 $51.6 $52.7 $53.8 $54.8
Days Sales Outstanding 69.3 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7

Inventory $18.0 $18.0 $31.0 $35.4 $39.4 $42.5 $44.2 $45.3 $46.4 $47.5 $48.4 $49.4
Days Inventory Held 85.6 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1

Other Current Assets $10.0 $10.0 $12.6 $14.3 $15.8 $17.0 $17.6 $18.0 $18.4 $18.8 $19.2 $19.6
% of Revenue 6.8% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4%

Total Current Assets $78.0 ($22.0) $56.0 $78.9 $89.6 $99.5 $106.9 $110.9 $113.8 $116.5 $119.0 $121.4 $123.8

PP&E $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0 $150.0
D&A ($9.0) ($11.9) ($13.5) ($15.0) ($16.0) ($16.6) ($17.0) ($17.4) ($17.8) ($18.1) ($18.5)
Capital Expenditures $9.0 $11.9 $13.5 $15.0 $16.0 $16.6 $17.0 $17.4 $17.8 $18.1 $18.5

Goodwill - $53.1 $53.1 $53.1 $53.1 $53.1 $53.1 $53.1 $53.1 $53.1 $53.1 $53.1 $53.1
Deferred Financing Fees - $15.0 $15.0 $12.0 $9.0 $6.0 $3.0 - - - - - -
Other Assets $45.0 $45.0 $45.0 $45.0 $45.0 $45.0 $45.0 $45.0 $45.0 $45.0 $45.0 $45.0
Total Long-Term Assets $195.0 $68.1 $263.1 $260.1 $257.1 $254.1 $251.1 $248.1 $248.1 $248.1 $248.1 $248.1 $248.1

Total Assets $273.0 $46.1 $319.1 $339.0 $346.7 $353.6 $358.0 $359.0 $361.9 $364.6 $367.1 $369.5 $371.9

AP $30.0 $30.0 $37.8 $42.8 $47.5 $50.9 $52.7 $54.0 $55.3 $56.5 $57.6 $58.8
Days Payable Outstanding 74.3 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1

Other Current Liabilities $6.0 $6.0 $7.6 $8.6 $9.5 $10.2 $10.5 $10.8 $11.1 $11.3 $11.5 $11.8
% of Revenue 4.1% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4%

Total Current Liabilities $36.0 - $36.0 $45.3 $51.4 $57.0 $61.1 $63.3 $64.8 $66.4 $67.8 $69.1 $70.5

Revolving Credit Facility - $30.0 $30.0 $45.3 $50.4 $52.7 $51.2 $47.8 $44.0 $39.6 $34.7 $29.2 $23.3
Term Loan A - $86.7 $86.7 $82.4 $78.0 $73.7 $69.4 $65.0 $60.7 $56.4 $52.0 $47.7 $43.4
Term Loan B - $57.8 $57.8 $57.2 $56.6 $56.1 $55.5 $54.9 $54.3 $53.8 $53.2 $52.6 $52.0
Mezzanine Loan - $28.9 $28.9 $30.1 $31.3 $32.5 $33.8 $35.2 $36.6 $38.0 $39.6 $41.1 $42.8
Other Long-Term Liabilities $30.0 $30.0 $30.0 $30.0 $30.0 $30.0 $30.0 $30.0 $30.0 $30.0 $30.0 $30.0
Total Long-Term Liabilities $30.0 $203.4 $233.4 $244.9 $246.4 $244.9 $239.8 $232.9 $225.6 $217.8 $209.5 $200.7 $191.5

Management's Equity - $10.0 $10.0 $9.8 $9.9 $10.3 $11.1 $12.0 $13.4 $14.8 $16.2 $17.7 $19.3
Shareholder's Equity $207.0 ($167.3) $39.7 $38.9 $39.1 $41.4 $46.0 $50.8 $58.1 $65.7 $73.7 $82.0 $90.7
Total Current Liabilities $207.0 ($157.3) $49.7 $48.7 $48.9 $51.8 $57.1 $62.9 $71.5 $80.5 $89.9 $99.7 $110.0

Total Liabilities and Shareholder's Equity $273.0 $46.1 $319.1 $339.0 $346.7 $353.6 $358.0 $359.0 $361.9 $364.6 $367.1 $369.5 $371.9

Check - - - - - - - - - - - - -
Debt Schedule
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

Libor Rate
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Libor Rate 3.3% 3.5% 3.8% 4.0% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%

Cash Flow
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Cash Flow Available For Mandatory Debt Paydown ($10.4) ($0.2) $2.7 $6.4 $8.3 $8.7 $9.3 $9.8 $10.4 $10.8
Term Loan A Mandatory Paydown ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3)
Term Loan B Mandatory Paydown ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6)
Cash Flow Available For Optional Debt Paydown ($15.3) ($5.1) ($2.2) $1.5 $3.4 $3.8 $4.4 $4.9 $5.5 $5.9

Revolving Credit Facility Optional Paydown $15.3 $5.1 $2.2 ($1.5) ($3.4) ($3.8) ($4.4) ($4.9) ($5.5) ($5.9)
Term Loan A Optional Paydown - - - - - - - - - -
Term Loan B Optional Paydown - - - - - - - - - -
Mezzanine Loan Optional Paydown - - - - - - - - - -
Cash Flow After Debt Paydown - - - - - - - - - -

Revolving Credit Facility

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Beginning Balance $30.0 $45.3 $50.4 $52.7 $51.2 $47.8 $44.0 $39.6 $34.7 $29.2
Drawdown (Paydown) $15.3 $5.1 $2.2 ($1.5) ($3.4) ($3.8) ($4.4) ($4.9) ($5.5) ($5.9)
Ending Balance $30.0 $45.3 $50.4 $52.7 $51.2 $47.8 $44.0 $39.6 $34.7 $29.2 $23.3

Undrawn Balance $30.0 - ($15.3) ($20.4) ($22.7) ($21.2) ($17.8) ($14.0) ($9.6) ($4.7) $0.8
Commitment Fee 0.5% - $0.1 $0.1 $0.1 $0.1 $0.1 $0.1 $0.0 $0.0 ($0.0)

Interest Expense L+2.5% ($0.8) ($1.1) ($1.3) ($1.3) ($1.3) ($1.2) ($1.1) ($1.0) ($0.9) ($0.7)
5.8% 6.0% 6.3% 6.5% 6.8% 6.8% 6.8% 6.8% 6.8% 6.8%

Term Loan A
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Beginning Balance $86.7 $82.4 $78.0 $73.7 $69.4 $65.0 $60.7 $56.4 $52.0 $47.7
Mandatory Paydown 5.0% ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3) ($4.3)
Optional Paydown - - - - - - - - - -
Ending Balance $86.7 $82.4 $78.0 $73.7 $69.4 $65.0 $60.7 $56.4 $52.0 $47.7 $43.4

Interest Expense L+3.5% ($5.9) ($5.8) ($5.7) ($5.5) ($5.4) ($5.0) ($4.7) ($4.4) ($4.0) ($3.7)
6.8% 7.0% 7.3% 7.5% 7.8% 7.8% 7.8% 7.8% 7.8% 7.8%

Term Loan B
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Beginning Balance $57.8 $57.2 $56.6 $56.1 $55.5 $54.9 $54.3 $53.8 $53.2 $52.6
Mandatory Paydown 1.0% ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6) ($0.6)
Optional Paydown - - - - - - - - - -
Ending Balance $57.8 $57.2 $56.6 $56.1 $55.5 $54.9 $54.3 $53.8 $53.2 $52.6 $52.0

Interest Expense L+4.0% ($4.2) ($4.3) ($4.4) ($4.5) ($4.6) ($4.5) ($4.5) ($4.4) ($4.4) ($4.3)
7.3% 7.5% 7.8% 8.0% 8.3% 8.3% 8.3% 8.3% 8.3% 8.3%

Mezzanine Loan
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Beginning Balance $28.9 $30.1 $31.3 $32.5 $33.8 $35.2 $36.6 $38.0 $39.6 $41.1
PIK Interest 4.0% $1.2 $1.2 $1.3 $1.3 $1.4 $1.4 $1.5 $1.5 $1.6 $1.6
Optional Paydown - - - - - - - - - -
Ending Balance $28.9 $30.1 $31.3 $32.5 $33.8 $35.2 $36.6 $38.0 $39.6 $41.1 $42.8

Interest Expense 6.0% ($1.7) ($1.8) ($1.9) ($2.0) ($2.0) ($2.1) ($2.2) ($2.3) ($2.4) ($2.5)
Assumptions
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

General

Base Case 1 Miscellaneous Product Mix

Base Case 1 Financing Fees Amortization Period (Years) 5.0 Product 1
Low Case 2 Exit Multiple 9.0x Product 2
High Case 3 Closing Date 5/31/2020 Product 3
Mgmt Case 4 Company Name Company Name Product 4
Sponsor Case 5 -

Sources & Uses

EBITDA $28.9

Sources Commitment Fee Amortization PIK Rate Rate EBITDA Multiple Amount
Revolving Credit Facility 0.5% L+2.5% 1.0x $30.0
Term Loan A 5.0% L+3.5% 3.0x $86.7
Term Loan B 1.0% L+4.0% 2.0x $57.8
Mezzanine Loan 4.0% 6.0% 1.0x $28.9
Management Rollover 0.3x $10.0
Cash on Hand 0.8x $22.0
Common Equity 1.9x $54.7
Total 10.0x $290.1

Uses Annual Amortization Amount EBITDA Multiple Amount

Purchase Price 9.0x $260.1
Financing Fees $3.0 0.5x $15.0
Other Fees (1) 0.3x $10.0
Other Fees (2) - -
Other Fees (3) - -
Other Fees (4) - -
Other Fees (5) 0.2x $5.0
Total 10.0x $290.1

Income Statement
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Revenue Growth - Product 1 13.9% 13.9% 13.9% 10.9% 7.9% 4.9% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Base Case 13.9% 10.9% 7.9% 4.9% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Low Case 12.0% 6.0% 2.0% 2.0% 2.0% 2.0% 1.0% 1.0% 1.0% 1.0%
High Case 13.9% 13.9% 12.9% 11.9% 9.9% 7.9% 5.9% 3.9% 3.9% 3.9%
Mgmt Case 13.9% 10.9% 7.9% 4.9% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Sponsor Case 13.9% 13.9% 13.9% 12.9% 11.9% 9.9% 7.9% 5.9% 5.9% 5.9%

Revenue Growth - Product 2 18.3% 18.3% 17.0% 15.0% 13.0% 8.0% 3.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Base Case 17.0% 15.0% 13.0% 8.0% 3.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Low Case 13.0% 10.0% 7.0% 4.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
High Case 19.0% 19.0% 17.0% 15.0% 13.0% 11.0% 8.0% 5.0% 3.0% 3.0%
Mgmt Case 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0% 17.0%
Sponsor Case 18.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0%

Revenue Growth - Product 3 14.4% 56.8% 25.0% 25.0% 20.0% 15.0% 10.0% 5.0% 4.0% 3.0% 2.0% 2.0%
Base Case 25.0% 25.0% 20.0% 15.0% 10.0% 5.0% 4.0% 3.0% 2.0% 2.0%
Low Case 15.0% 10.0% 5.0% 4.0% 3.0% 2.0% 2.0% 1.0% 1.0% 1.0%
High Case 35.0% 30.0% 25.0% 25.0% 20.0% 15.0% 10.0% 5.0% 4.0% 3.0%
Mgmt Case 30.0% 30.0% 20.0% 20.0% 10.0% 10.0% 10.0% 5.0% 5.0% 5.0%
Sponsor Case 40.0% 30.0% 20.0% 10.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%

Revenue Growth - Product 4 1.2% 2.4% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%
Base Case 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%
Low Case 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
High Case 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Mgmt Case 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Sponsor Case 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

Revenue Growth - - - - - - - - - - - - - -
Base Case - - - - - - - - - -
Low Case - - - - - - - - - -
High Case - - - - - - - - - -
Mgmt Case - - - - - - - - - -
Sponsor Case - - - - - - - - - -

Gross Margin - Product 1 63.8% 61.7% 59.8% 64.6% 64.6% 64.6% 64.6% 64.6% 64.5% 64.5% 64.4% 64.4% 64.3%
Base Case 64.6% 64.6% 64.6% 64.6% 64.6% 64.5% 64.5% 64.4% 64.4% 64.3%
Low Case 64.6% 63.6% 62.6% 61.6% 60.6% 59.6% 58.6% 57.6% 56.6% 55.6%
High Case 64.6% 64.6% 64.6% 64.6% 64.6% 64.6% 64.6% 64.6% 64.6% 64.6%
Mgmt Case 65.0% 65.0% 65.0% 65.0% 65.0% 64.0% 64.0% 64.0% 64.0% 64.0%
Sponsor Case 64.9% 64.9% 64.9% 64.9% 64.9% 64.9% 64.9% 64.9% 64.9% 64.9%

Gross Margin - Product 2 33.2% 30.7% 33.7% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5%
Base Case 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5%
Low Case 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5%
High Case 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5%
Mgmt Case 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5%
Sponsor Case 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5% 32.5%

Gross Margin - Product 3 14.4% 31.5% 38.5% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0%
Base Case 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0%
Low Case 40.0% 40.0% 40.0% 40.0% 38.0% 38.0% 38.0% 35.0% 35.0% 35.0%
High Case 43.0% 45.0% 50.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0% 55.0%
Mgmt Case 45.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0%
Sponsor Case 45.0% 50.0% 55.0% 60.0% 60.0% 60.0% 60.0% 60.0% 55.0% 50.0%

Gross Margin - Product 4 25.3% 25.6% 25.6% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5%
Base Case 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5%
Low Case 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5%
High Case 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5%
Mgmt Case 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5%
Sponsor Case 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5% 25.5%

Gross Margin - - - - - - - - - - - - - - -
Base Case - - - - - - - - - -
Low Case - - - - - - - - - -
High Case - - - - - - - - - -
Mgmt Case - - - - - - - - - -
Sponsor Case - - - - - - - - - -

Marketing (% of Revenue) 0.9% 0.9% 0.9% 3.0% 3.0% 2.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Base Case 3.0% 3.0% 2.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Low Case 3.0% 3.0% 2.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
High Case 3.0% 3.0% 2.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Mgmt Case 3.0% 3.0% 2.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%
Sponsor Case 3.0% 3.0% 2.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0% 1.0%

Administration (% of Revenue) 7.8% 7.5% 6.6% 8.1% 8.1% 8.0% 8.0% 7.9% 8.0% 8.1% 8.2% 8.3% 8.4%
Base Case 8.1% 8.1% 8.0% 8.0% 7.9% 8.0% 8.1% 8.2% 8.3% 8.4%
Low Case 8.1% 8.1% 8.1% 8.1% 8.1% 8.2% 8.3% 8.4% 8.5% 8.6%
Assumptions
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

High Case 8.1% 8.0% 7.9% 7.8% 7.7% 7.7% 7.7% 7.7% 7.8% 7.9%
Mgmt Case 8.1% 8.1% 8.1% 8.1% 8.1% 8.1% 8.1% 8.1% 8.1% 8.1%
Sponsor Case 8.1% 8.1% 8.1% 8.1% 8.1% 8.1% 8.1% 8.1% 8.1% 8.1%
Assumptions
Company Name Leveraged Buyout Model | February 4, 2020
Base Case | 5-Year Returns of 21.1% / 2.6x

R&D (% of Revenue) 1.1% 1.5% 0.9% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3%
Base Case 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3%
Low Case 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3%
High Case 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3%
Mgmt Case 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3%
Sponsor Case 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3%

Rent (% of Revenue) 15.6% 15.4% 15.1% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5%
Base Case 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5% 16.5%
Low Case 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0% 18.0%
High Case 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%
Mgmt Case 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%
Sponsor Case 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Other Operating Costs (% of Revenue) 4.6% 4.8% 4.7% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%
Base Case 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%
Low Case 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2% 3.2%
High Case 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%
Mgmt Case 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%
Sponsor Case 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2% 5.2%

D&A (% of Revenue) 5.5% 6.4% 6.1% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Base Case 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Low Case 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0% 9.0%
High Case 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%
Mgmt Case 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Sponsor Case 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%

Tax (% of Earnings Before Tax) 19.5% 21.8% 17.6% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
Base Case 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
Low Case 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
High Case 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%
Mgmt Case 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%
Sponsor Case 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 20.0%

Balance Sheet
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

AR (Days Sales Outstanding) 69.3 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7
Base Case 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7
Low Case 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7
High Case 70.7 70.7 70.7 70.7 70.7 70.7 70.7 70.7 70.7 70.7
Mgmt Case 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7
Sponsor Case 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7 75.7

Inventory (Days Inventory Held) 85.6 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1
Base Case 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1
Low Case 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1
High Case 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1
Mgmt Case 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1
Sponsor Case 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1 134.1

Other Current Assets (% of Revenue) 6.8% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4%
Base Case 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4%
Low Case 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4%
High Case 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4%
Mgmt Case 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4%
Sponsor Case 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4% 7.4%

Capital Expenditures (% of Revenue) 5.5% 6.4% 6.1% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Base Case 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Low Case 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
High Case 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%
Mgmt Case 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Sponsor Case 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%

AP (Days Payable Outstanding) 74.3 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1
Base Case 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1
Low Case 84.1 84.1 84.1 84.1 84.1 84.1 84.1 84.1 84.1 84.1
High Case 79.1 79.1 79.1 79.1 79.1 79.1 79.1 79.1 79.1 79.1
Mgmt Case 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1
Sponsor Case 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1 81.1

Other Current Liabilities (% of Revenue) 4.1% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4%
Base Case 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4%
Low Case 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4%
High Case 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4%
Mgmt Case 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4%
Sponsor Case 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4% 4.4%

Debt Schedule
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Libor Rate 3.3% 3.5% 3.8% 4.0% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%
Base Case 3.3% 3.5% 3.8% 4.0% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%
Low Case 3.3% 3.5% 3.8% 4.0% 4.3% 4.5% 4.8% 5.0% 5.3% 5.5%
High Case 3.3% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5% 3.5%
Mgmt Case 3.3% 3.5% 3.8% 4.0% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%
Sponsor Case 3.3% 3.5% 3.8% 4.0% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%