LBO & Paper LBO
Entry 80 EBITDA at 12x, 5.0x net leverage. Exit yr 5: 80 EBITDA (flat), 12x (flat), but FCF cut net debt by 2.0x of entry EBITDA. MOIC?
Model answer
Entry EV = 80 × 12 = 960. Entry net debt = 5.0 × 80 = 400. Entry equity = 960 − 400 = 560. Net debt reduced by 2.0x × 80 = 160, so exit net debt = 400 − 160 = 240. Exit EV = 960 (flat). Exit equity =…
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