Confidential

03/09/2015 22:22:55

NOTE: You can't rely on the formulas in this sample spreadsheet, because it has some circular references and pulls values from other worksheets which are not included.
If you want to adapt it for use with the case, you will have to review the logic and formulas to be sure they are valid.

Sample Leveraged Buyout Analysis

Purchase Price

($ in millions)

$771.9

EBITDA

58.0

Implied EBITDA multiple

13.3x

Sources and Uses Summary

Uses of Funds
Purchase Price of Equity
Plus: Debt Refinanced
Less: Cash
Enterprise Value
Senior Debt Financing Fees
Subordinated Debt Financing Fees
Advisory Fees
Total Uses of Funds

Cash-for-Stock Purchase - Goodwill Not Deductible For Tax Purposes

Return Calculation
$538.5
0.0
0.0
538.5
0.0
0.0
20.0
$558.5

Sources of Funds
Revolver
Term Loan B
Senior subordinated notes
Equity
Other [Mgmt. Equity or Options]
Total Sources of Funds

%
3.1%
22.4%
31.3%
43.1%
0.0%
100.0%

$17.5
125.0
175.0
241.0
0.0
$558.5

Int. Rate
7.3%
8.1%
10.9%
0.0%
0.0%

Equity %

2.5%
97.5%
0.0%
100.0%

Subordinated Debt IRR

Equity IRR

Purchase Price Multiple Analysis

2000
Net Sales
EBIT
EBITDA

Cash Flow Analysis

Net Sales
EBITDA
Depreciation & Amortization
EBITA
Amortization of Intangibles Assets and Fin. Fees
EBIT
Less: Interest Expense
Revolver
Term Loan B
Senior subordinated notes
Total Interest Expense
Pre-Tax Profit
Cash Income Taxes @
Net Income

30.0%

+Depreciation and Amortization

-Capital Expenditures, Incl. Acq. Earn-Out
-Working Capital Requirements
Cash Flow Available for Debt Repayment
Cash Flow Available after Debt Repayment

Pro Forma
2000
$471.4
58.0
17.5
40.5
0.0
40.5

0.0

2001
$536.4
75.5
19.8
55.6
0.0
55.6

Fiscal Years Ending December 31,

2002
2003
2004
$618.0
$710.7
$816.5
89.1
109.1
134.3
22.9
26.3
30.2
66.2
82.8
104.1
0.0
0.0
0.0
66.2
82.8
104.1

2005
$938.2
162.1
34.7
127.4
0.0
127.4

2006
$985.1
$170.2
36.4
133.8
0.0
133.8

19.0
29.1

0.0
10.1
19.0
28.0

0.0
9.0
19.0
26.8

0.0
7.8
19.0
25.4

0.0
6.4
19.0
24.0

0.0
5.0
19.0
22.5

11.4
3.2
8.2

27.6
8.1
19.5

39.4
11.6
27.8

57.4
17.0
40.4

80.1
23.8
56.3

104.9
31.3
73.6

113.0
33.7
79.3

17.5
15.2
24.6
($14.0)

19.8
18.5
4.3
$16.6
$0.0

22.9
18.5
(1.0)
$33.2
$18.3

26.3
18.5
(0.3)
$48.5
$33.4

34.7
18.5
(0.6)
$90.5
$72.8

36.4
18.5
(0.6)
$97.9
$140.8

30.2 #
18.5###
(0.6) #
$68.6
$52.3

Pro Forma
2000
1.4x
2.0x
N/A
N/A
$58.0
2.5x
5.5x
56.9%

2001
2.0x
2.7x
5.2%
0.0%
$75.5
1.7x
4.0x
53.6%

At
Closing
$17.5
125.0
175.0
241.0
$558.5
$0.0

2001
$0.9
125.0
175.0
260.5
$561.4
$0.0

IRR

Fiscal Years Ending December 31,

2002
2003
2004
2.5x
3.3x
4.3x
3.3x
4.3x
5.6x
9.9%
14.7%
19.8%
11.2%
23.3%
36.3%
$89.1
$109.1
$134.3
1.2x
0.9x
0.6x
3.2x
2.5x
1.9x
49.8%
45.2%
39.8%

2005
5.7x
7.2x
25.4%
50.4%
$162.1
0.4x
1.5x
34.1%

2006
6.4x
8.2x
31.4%
65.7%
$170.2
0.3x
1.3x
28.8%

Revolver
Term Loan B
Senior Subordinated Debt
Equity
Total Capitalization
Cash Balance

Fiscal Years Ending December 31,

2003
2004
$0.0
$0.0
95.9
79.6
175.0
175.0
328.7
385.0
$599.7
$639.6
$51.7
$104.0

2005
$0.0
62.0
175.0
458.6
$695.6
$176.8

2006
$0.0
42.9
175.0
537.9
$755.8
$140.8

EBITDA
Times: Assumed Exit Multiple
Equals: Implied Enterprise Value
Less: Total Debt Outstanding
Plus: Cash Balance
Equals: Implied Enterprise Value

$75.5
5.5
$415.0
(179.2)
$0.6
$236.4

$162.1
5.5
$891.5
(89.40)
$0.6
$802.7

$170.2
6.5
$1,106.3
(89.40)
$1.6
$1,018.5

$0.0
111.03
175.0
288.3
$574.4
$18.3

$89.1###
5.5 #
$490.1###
(159.70)
$0.6###
$331.0###

$109.1###
5.5 #
$600.1###
(138.40)
$0.6###
$462.3###

$134.3###
5.5 #
$738.8###
(114.70)
$0.6###
$624.7###

2002

1.0 x
9.7 x
7.1 x

0.9 x
8.1 x
6.0 x

27.21% (uses RATE function)

Acquisition Fees
% Advisory Fees (Buyer's Inv. Banking, Legal, etc.)
$ Advisory Fee
Senior Term Debt Fee %
Deferred Senior Debt Fee $
Amortization Period
Annual Amortization

Capitalization
2002

2001

1.1 x
13.3 x
9.3 x

0.0
3.5
19.0
20.8 ###

Coverages & Debt Amortization

EBITA Interest Coverage

EBITDA Interest Coverage
Cumulative Total Debt Repaid
Cumulative Senior Term Debt Repaid
EBITDA
Senior Debt / EBITDA
Total Debt / EBITDA
Total Debt / Total Capitalization

2005 EBITDA Exit Multiple

5.5x
6.0x
#VALUE!
#VALUE!
27.5%
29.9%

Subordinated Debt Cash Flows

0.0%
$0.0
5
$0.0

1.0%
$5.4
Subordinated Debt Fee %
Deferred Sub. Debt Fee $
Amortization Period
Annual Amortization

2.0%
$3.5
5
$0.7