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    LBO Model - Valuation

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    sashaathrg
    The document presents an LBO structure and return calculations for acquiring a target company. It outlines the sources and uses of funds for the acquisition including senior debt of INR 45 crore at 9% interest, junior debt of INR 100 crore at 13% interest, and equity of INR 60 crore. It then shows projections for the target's income statement, cash flows, debt balances and returns under different exit multiples over a 5 year period.

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    LBO Model - Valuation

    Uploaded by

    sashaathrg
    373 views6 pages
    The document presents an LBO structure and return calculations for acquiring a target company. It outlines the sources and uses of funds for the acquisition including senior debt of INR 45 crore at 9% interest, junior debt of INR 100 crore at 13% interest, and equity of INR 60 crore. It then shows projections for the target's income statement, cash flows, debt balances and returns under different exit multiples over a 5 year period.

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    LBO Model Valuation

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    The document presents an LBO structure and return calculations for acquiring a target company. It outlines the sources and uses of funds for the acquisition including senior debt of INR 45 crore at 9% interest, junior debt of INR 100 crore at 13% interest, and equity of INR 60 crore. It then shows projections for the target's income statement, cash flows, debt balances and returns under different exit multiples over a 5 year period.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLS, PDF, TXT or read online from Scribd
    Download as xls, pdf, or txt
    373 views6 pages

    LBO Model - Valuation

    Uploaded by

    sashaathrg
    The document presents an LBO structure and return calculations for acquiring a target company. It outlines the sources and uses of funds for the acquisition including senior debt of INR 45 crore at 9% interest, junior debt of INR 100 crore at 13% interest, and equity of INR 60 crore. It then shows projections for the target's income statement, cash flows, debt balances and returns under different exit multiples over a 5 year period.

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    Exhibit 1 LBO Structure

    Assumptions :
    Sales Growth
    COGS as % of Sales
    S,G&A as % of Sales
    Depreciation as % of Sales
    Transaction Fee Amortization (5 years)
    Tax Rate
    Cap. Ex. as % of Sales
    Inc. in WC as % of Inc. in Sales
    Sources of Funds
    Senior Debt @
    Junior Debt @
    Equity

    9.0% INR 45.0


    13.0% INR 100.0
    INR 60.0

    Total

    INR 205.0

    Uses of Funds
    Purchase Price
    Transaction Costs

    INR 200.0
    INR 5.0

    Total

    INR 205.0

    Target Projections

    Less :

    =
    Less :
    =
    Less :

    =
    Less :
    =

    Net Sales
    COGS
    S,G&A
    Depreciation
    Operating Income
    Transaction Fee Amortization EBIT
    Interest Expense
    Senior Debt 9.0%
    Junior Debt 13.0%
    Total Interest Expense
    Pre-tax Income
    Income Taxes
    Net Income
    Free Cash Flow Calculation
    Net Income
    Plus: Depreciation
    Plus: Transaction Fee Amortization
    Less: Capital Expenditures

    0
    170.00
    102.00
    25.50
    9.40
    33.10
    33.10

    0.00
    33.10

    Less: Increase in Working Capital


    Free Cash Flow

    Capitalization
    0
    Senior Debt - Beginning Balance
    Mandatory Amortization
    Cash Sweep
    Senior Debt - Ending Balance

    45.00

    Junior Debt - Beginning Balance


    Mandatory Amortization
    Cash Sweep
    Junior Debt - Ending Balance

    100.00

    Senior Debt
    Junior Debt
    Equity
    Total Capitalization
    Senior Debt
    Junior Debt
    Equity

    Exhibit 2 LBO Return Calculations


    Cash Flows to Common Equity
    EBITDA
    Total Debt
    Exit Multiple
    5.5*
    6.5*
    7.5*

    1/1/2000

    Outflow
    (60.00)
    (60.00)
    (60.00)

    Exit In:

    EBITDA multiple

    IRR

    Year 1

    5.5*
    6.5*
    7.5*

    (60.00)
    (60.00)
    (60.00)

    Year 2

    5.5*
    6.5*
    7.5*

    (60.00)
    (60.00)
    (60.00)

    Year 3

    5.5*

    (60.00)

    6.5*
    7.5*

    (60.00)
    (60.00)

    Year 4

    5.5*
    6.5*
    7.5*

    (60.00)
    (60.00)
    (60.00)

    Year 5

    5.5*
    6.5*
    7.5*

    (60.00)
    (60.00)
    (60.00)

    Years
    1
    5.0%
    60.0%
    15.0%
    5.5%
    INR 1.0
    35.0%
    5.5%
    7.0%

    2
    5.0%
    60.0%
    15.0%
    5.5%
    INR 1.0
    35.0%
    5.5%
    7.0%

    3
    5.0%
    60.0%
    15.0%
    5.5%
    INR 1.0
    35.0%
    5.5%
    7.0%

    4
    5.0%
    60.0%
    15.0%
    5.5%
    INR 1.0
    35.0%
    5.5%
    7.0%

    5
    5.0%
    60.0%
    15.0%
    5.5%
    INR 1.0
    35.0%
    5.5%
    7.0%

    Years
    1
    178.50
    107.10
    26.78
    9.82
    34.81
    1.00
    33.81

    2
    187.43
    112.46
    28.11
    10.31
    36.55
    1.00
    35.55

    3
    196.80
    118.08
    29.52
    10.82
    38.38
    1.00
    37.38

    4
    206.64
    123.98
    31.00
    11.36
    40.29
    1.00
    39.29

    5
    216.97
    130.18
    32.55
    11.93
    42.31
    1.00
    41.31

    4.05
    13.00
    17.05
    16.76
    5.87
    10.89

    3.12
    13.00
    16.12
    19.42
    6.80
    12.63

    2.04
    13.00
    15.04
    22.33
    7.82
    14.52

    0.80
    13.00
    13.80
    25.50
    8.92
    16.57

    0.00
    12.08
    12.08
    29.22
    10.23
    19.00

    10.89
    9.82
    1.00
    9.82

    12.63
    10.31
    1.00
    10.31

    14.52
    10.82
    1.00
    10.82

    16.57
    11.36
    1.00
    11.36

    19.00
    11.93
    1.00
    11.93

    0.60
    11.30

    0.62
    13.00

    0.66
    14.86

    0.69
    16.89

    0.72
    19.27

    1
    45.00
    1.00
    10.30
    34.70

    Years
    2
    34.70
    1.00
    12.00
    22.70

    3
    22.70
    1.00
    13.86
    8.84

    5
    8.84
    1.00
    8.84
    0.00

    0.00
    1.00
    0.00
    0.00

    100.00
    0.00
    0.00
    100.00

    100.00
    0.00
    0.00
    100.00

    100.00
    0.00
    0.00
    100.00

    100.00
    0.00
    7.04
    92.96

    92.96
    0.00
    0.00
    92.96

    34.70
    100.00
    70.89
    205.60

    22.70
    100.00
    12.63
    135.33

    8.84
    100.00
    14.52
    123.36

    0.00
    92.96
    16.57
    109.53

    0.00
    92.96
    19.00
    111.95

    Years
    1/1/2002
    1/1/2003
    45.86
    48.20
    122.70
    108.84
    Inflows

    1/1/2004
    50.66
    92.96

    1/1/2005
    53.24
    92.96

    1/1/2001
    43.63
    134.70

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