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Paper LBO

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8 views3 pages

Paper LBO

Uploaded by

jayantrawat.work
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Inputs : In Millions $ LBO modeling

LTM Revenue 500


EBITDA 20% Interest
x EBITDA Cash Fixed PIK Fixed Spread Sweep
LTM EBITDA 100 Term Loans: 3.0 x 3% 50%
purchase multiple 12 x Senior Notes: 1.0 x 3% 5%
Subordinated Notes: 1.0 x 10%
Purchase TEV : 1200
Fees : 24 Min Cash % Sales: 5%

Management option pool 5% Inventory % Sales: 20%


Receivables % Sales: 10%
EBITDA exit Multiple 10.00 x Payables % Sales: 15%
Exit multiple
Tax Rate: 25%

Sources Uses
Purchase TEV : 1200
Term Loans: 300 Fees : 24
Senior Notes: 100 Initial cash injection: 25
Subordinated Notes: 100
Equity 749 Total uses 1249
Total uses 1249

Drivers: Year 0 year 1 Year 2 Year 3 Year 4 Year 5


Widget Unit Sales (M): 4 4.40 4.80 5.18 5.54 5.87
Growth Rate: 10% 9% 8% 7% 6%

Average Price per Widget: 125 131.3 137.2 142.6 147.6 152.1
Growth Rate: 5.0% 4.5% 4.0% 3.5% 3.0%

# Factories: 8 8.8 9.592 10.36 11.08 11.75


Widgets per Factory (M): 0.5 0.5 0.5 0.5 0.5 0.5

Maint. CapEx per Factory: 2


Growth CapEx per Factory: 25

Total CapEx: 36 37.4 38.37 38.85 38.80


% Sales: 6.2% 5.7% 5.2% 4.7% 4.3%

Gross Margin %: 50% 49% 48% 47% 46% 45%


COGS: 250 283.0 315.7 347.3 376.4 402.0
Fixed Expenses: 150 158 165 171 177 182

Depreciation: 20 23.10 24.34 25.12 25.37 25.01


% Sales: 4% 4.0% 3.7% 3.4% 3.1% 2.8%
Cashflow projections Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Sales 500 577.50 657.80 738.84 818.23 893.34
Growth 15.50% 13.91% 12.32% 10.75% 9.18%

EBITDA 100 137.0 177.5 220.4 264.7 308.9


Margin 20% 24% 27% 30% 32% 35%

(-) Depreciation (20) (23) (24) (25) (25) (25)


(-) Interest

Pre -Tax Income 113.9 153.1 195.3 239.3 283.8


Taxes 5.70 7.66 9.76 11.97 14.19

Net income 108.23 145.47 185.53 227.35 269.66


Calculation of free cash flow
Net Income: 108.23 145.47 185.53 227.35 269.66
(+) Depreciation: 23 24 25 25 25
(+) Non-Cash Interest:
(+/-) Change in WC: (12) (12) (12) (12) (11)
(-) CapEx: (36) (37) (38) (39) (39)
Free Cash Flow: 178.95 219.26 261.17 303.47 344.73

(-) Mandatory Repayments: (15) (16) (17) (17) (18)


(+) Beginning Cash Balance: 25
(-) Min Cash: (29) (33) (37) (41) (45)
(+) Free Cash Flow: 178.95 219.26 261.17 303.47 344.73

CF Avail. For Debt Repayment: 248 268 315 362 408

CF Used for Debt Repayment:


Ending Cash:

Debt Balances:
Term Loans: 300 315 330.75 347.2875 364.651875 382.8844688
Senior Notes: 100 150 200 250 300 350
Subordinated Notes: 100 124 148 172 196 220

Term Loan Repayment %'s: 5% 10% 10% 15% 20%

Interest:
Benchmark Rate: 1.5% 1.9% 2.3% 2.7% 3.0%

Term Loans - Cash: 234 223 189 178 167


Senior Notes - Cash: 231 122 134 156 178
Senior Notes - PIK: 50 50 50 50 50
Subordinated Notes - PIK: 24 24 24 24 24
Exit Enterprise Value:
(-) Debt: 34 45 32 30 25
(+) Cash: 23 25 25 27 28
Exit Equity Value:
(+) Cash from Mgmt Options:
(-) Equity to Mgmt Optionholders:
Net Equity to Sponsor:

Sponsor Multiple:
Sponsor IRR:

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