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1 TOC
2 Summary
3 Model
4 Waterfall Chart
5 Integrity
6 Rachet Example
7 Goodwill Example
8 Sheet2
9 Index

Description

Author

File Name:
C:\Courses\Course Materials\3 Templates and Exercises M&A Models\LBO Shell.xls
Colour Codes

Summary
EBITDA Scenario
Sensitivty Factor

Cash F

Base Case

100%

4,000.00
3,500.00

EBITDA

3,200.00

Sources and Uses Map

Amount vs EBITDA

3,000.00

Pct

IRR

Break Even

2,500.00
2,000.00

Project IRR
WACC
Economic Return

-2.5%
#N/A
#N/A
0.0%

1,500.00
1,000.00
500.00
-

Volatility
Model Verified

22%
TRUE

8%
E
q
u
i
t
y

-3.01%
11.00%
-14.01%
9.00

Entry Multiple 1
Senior Debt/Capi

7.50

Holding Period

Apply Vol

I
R
R

6%
4%
2%
0%

60%

Exit Multiple EV/EBIDA

7.3%
3.0%
Err:523
0.0%

65%

12.00
38,400

49.5%
39.1%
11.4%
0.0%
100.0%

70%

Entry Multiple EV/EBITDA


Transaction Price

5.94
4.69
1.37
12.00

75%

19,000
15,000
4,391
0
38,391

80%

Senior Debt
Mezzenaine Debt
Investor Equity
Mangement Equity
Total

EB

100

100

Equity Cash Flows

Cash Flow Waterfall


4,000.00

Junior Debt
Service
Senior Sweep
Senior Debt
Service
Cash Flow

3,500.00
3,000.00
2,500.00
2,000.00

(2,000.0)
(2,500.0)

(4,000.0)

500.00

(4,500.0)

(5,000.0)

10

11

12

Entry Multiple 11.50 Exit Multiple 8.60


Senior Debt/Capital 45.2% Mezz Debt 36%
8%
Equity IRR
Junior IRR
Senior IRR
Project IRR

4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

70%

0%

75%

9 10 11 12

J-Curve
Entry Multiple 12.00 Exit Multiple 7.5
Senior Debt/Capital 49.5%
1200.00%

2%

EBITDA Sensitivty

Equity IRR

6%

80%

(1,500.0)

(3,500.0)

1,000.00

I
R
R

(1,000.0)

(3,000.0)

1,500.00

E
q
u
i
t
y

(500.0)

1000.00%
800.00%
600.00%
400.00%
200.00%
0.00%

3
4
5
6
Holding Period

h Flows

9 10 11 12 13

e
Exit Multiple 7.50
pital 49.5%

5
6
Period

10

Model
Model Verfied

TRUE

Base Case

Equity IRR
Mezz IRR
Entry Multiple
Exit Multiple
0

Err:523
3.0%
12.00
7.50
2

Transaction Inputs
Operating Inputs
Current EBITDA
EV/EBITDA Multiple
Enterprise Value

3,200.00
12
38,400.00

Holding Period

9.00

Exit Multiple

7.50

Apply Volatility
Volatility

120

FALSE

75
Volatility

22%

22

Finaning Inputs
Arrangement Fees

1.50%

Total Fees

576.00

Cash of Target Used


Management Inventive
Hurdle Rate
Pct of Excess

2,000.00

25%
15%

Debt Inputs
Senior Debt Issued

19,000.0

Grace Period (Years)


Repayment Period (Years)
Interest Rate

1
6
7.30%

Debt Service Revere Acct Months


Debt Service Reserve Intrest Rate
Minimum Debt Service Reserve

0
6.50%
-

Cash Sweep Covenant (DSCR)

1.2

7.30%

7.30%

7.30%

Interest Rate Increase Trigger


Increased Interest Rate

1.1
7.80%

Debt Fees

1.00%

Mezzanine Debt Issued


Interest Capitalised
Interest Rate
Fees
Equity Kicker
Cash Sweep Table

15,000.00
FALSE
10.00%

10.00%

10.00%

10.00%

27.50%

27.50%

27.50%

60.00
40.00

60.00
40.00

60.00
40.00

200

200

5%
2%
8%
5%

7%
2%
9%
7%

1.50%

DEBT/EBITDA
From
To
5.00
5.00
3.00
3.00
2.50
2.50
0.00

Percent
100%
75%
50%
0%

Stanby Equity
Commitment
Term of Commitment (yrs)
Trigger - DSCR
Interest Income Rate

1,000
1
1
3.00%

Tax and Other Assumptions


Book Depreciation
Tax Depreciation

10.00%
12.00%

Income Tax Rate

27.50%

Amortisation Rate

20.00%

EBITDA Margin

32.00%

DOS - Debtors
DOS - Expense

60.00
40.00

60.00
40.00

Retirments
Operating Inputs
EBITDA Sensitivity Factor

100%

100
Base Case

EBITDA Growth
Base Case
Downside Case
Upside Case
Base Case

Captial Expenditure

500.00

100.00

Working Section
Base EBITDA
Growth Index
Sensitivity Factor

3,200.00
1.00
100%

3,200.00
1.05
100%

3,200.00
1.12
100%

Volatility Applied
Volatility Factor

1.00

1.07

0.71

3,200.0

3,360.0

3,595.2

EBITDA
Terminal Procceeds
Revenues
DOS - Debtors
Percent of Revenues
Debtor Balance
DOS- Creditors
Pct of Revenues
Creditor Balance
Trade Working Capital

Sources of Funds
Cash of Target
Senior Debt
Mezzanine Debt
Investor Equity
Management Team Rachet
Total Sources of Funds
Source and Use Check
Goodwill

60
16%
1,000.00

10,500
60
16%
1,726.03

11,235
60
16%
1,846.85

40.00
1,000.00

40.00
11.0%
1,150.68

40.00
11.0%
1,231.23

0.00

575.34

615.62

575.34

40.27

Change in Working Capital


Uses and Sources of Funds
Uses of Funds
Acquisition of Target
Arrangement Fees
Debt Fees
Debt Service Reserve Account
Standby Equity
Total Uses of Funds

38,400.0
576.0
415.0
1,000.0
40,391.0

2,000.0
19,000.0
15,000.0
4,391.0
40,391.0
1.0

Purchase Price of Equity


Less: Existing Equity on Books
Net Value
Less: Asset Write-ups
Less: Debt Write-downs
Add: Consulting and Legal Fees
Goodwill
Pro-Forma Balance Sheet
Assets
Cash
Debt Service Reserve Acct
Stand-by Equity Deposit
Trade Debtors
Fixed Assets
Unamortised Fees
Goodwill
Total
Senior Debt
Mezzanine Debt
Payables
Equity
Total

38,400
6,500
31,900
500
576
31,976

Opening
5,000

Write-up

Issue Debt

Cash
(2,000.0)

1,000.0
1,000
1,500

500
31,976

7,500
19,000.0
15,000.0
1,000
6,500
7,500

Pro-Forma Check
Debt Schedule
Term

Senior Debt
Total Debt Balance

19,000

19,000

19,000

Opening Balance
Add: Debt Draws
Less: Scheduled Repayments
Less: Prepayments from Sweep
Add: Defaults on Debt
Less: Repayments of Default
Less: Repayment at Terminal Date
Closing Balance

19,000
-

19,000
856
18,144

18,144
3,167
1,108
16,085

Debt Fees

190.00
7.30%
1,387

7.30%
1,324

19,000

Interest Rate
Interest Expense
Mezzanine Debt
Capitalise Interest

7.30%
-

0.00%

Total Debt Balance


Opening Balance
Add: Debt Draws
Add: Capatilised Interest
Less: Prepayments from Sweep
Add: Defaults on Debt
Less: Repayments of Default
Less: Scheduled Repayments
Closing Balance

15,000.00
-

16,500.00
-

15,000.00

1,500.00
16,500.00

3,150.00
1,500.00
18,150.00

Debt Fee Percent


Debt Fees

1.50%
225.00

0.00%
-

0.00%
-

Interest Rate
Interest Expense
Interest Paid

10.00%
-

10.00%
1,500.00
1,500.00

10.00%
1,650.00
1,650.00

1,387.00
-

4,491.15
-

Debt Service Reserve Account


Debt Service Reserve Months

15,000.00
-

Total Senior Debt Service


Required Balance in Account

Opening Balance
Add: Inflows from Initial Cash
Less: Payment of Debt Service
Add: New Inflows
Closing Balance

Interest Income Rate


Interest Income

6.50%
-

6.50%
-

6.50%
-

2,000

2,000
500
200
0
2,300

2,300
100
200
0
2,200

10.00%
12.00%

10.00%
12.00%

10.00%
12.00%

200
240

230
276

Plant Assets and Fee Amortisation


Plant Assets
Opening Balance
Add: Cap Exp
Less: Retirements
Less: Book Value when Sell
Closing Balance
Book Depreciation Rate
Tax Depreciation Rate
Book Depreciation Charge
Tax Depreciation Charge

Accumulated Depreciation
Opening Balance
Add: Depreciation Charge
Less: Retirements
Less: Book Value when Sell
Closing Balance
Debt Financing Fees
Opening Balance
Add: Fees
Closing Balance

200
200
-

230
200
30

415

415

415

415

20.00%
83.00

20.00%
83.00

83
332

166
249

415

Amortisation Rate
Amortisation
Accumlated Amortisation
Net Unamortised Fees
Sale Proceeds
Less: Net Book Value
Gain on Sale
Net Book Value

2,000

2,300

2,170

3,360.00
200.00
3,160.00
1,387.00
1,500.00
83.00
190.00
52.25
137.75

3,595.20
230.00
3,365.20
1,324.48
1,650.00
83.00
307.72
84.62
223.10

Book EBT
Less: Tax Depreciation
Less: Gain on Sale
Adjusted EBT

190.00
40.00
150.00

307.72
46.00
261.72

NOL Balance
Opening Balance
Add: Tax Loss
Less: Withdrawls
Closing Balance

Profit and Loss


EBITDA
Add: Gain on Sale at Terminal Year
Less: Depreciation
EBIT
Less: Interest Expense on Senior
Less: Interest Expense on Junior
Add: Interest Income
Less: Fee Amortisation
EBT
Less: Book Taxes
Earnings
Tax Paid and Deferred Tax

Taxable Income
Tax Rate
Taxes Paid
Less: Book Taxes
Change in Deferred Taxes
Accumulated Deferred Tax
Opening Balance
Add: Deferred Tax Change
Closing Balance
Cash Flow
EBITDA
Add: Interest Income
Add: Sale Proceeds
Less: WC Changes
Less: Cash Taxes
Operaing Cash Flow
Less: Capital Expenditures
Cash after Cap Exp
Add: New Senior Debt
Add: New Mezz Debt
Add: Senior Debt From Transaction
Add: Equity Issued
Less: Debt Fees and Other Fees
Less: Stanby Equity
Less: DSCRA Inflows
Plus: DSCRA Outflows
Cash for Waterfall
Less: Senior Interest
Less: Senior Repayment
Less: Repayment of Default
Cash before Senior Sweep
Less: Pre-payments from Sweep
Cash Flow after Senior Debt
Add: Defatult on Senior Debt
Cash Flow to Junior Debt
Less: Junior Cash Interest
Less: Junior Repayment
Less: Repayment of Default
Cash after Junior Debt
Add: Default on Junior
Net Cash Flow
Increase in Cash Balance
Reduction in Cash Balance
Equity Distributions
Cash Balance

150.00

261.72

27.50%
41.25
52.25
11.00

27.50%
71.97
84.62
12.65

11.00
11.00

11.00
12.65
23.65

3,360.00
575.34
41.25
2,743.41
500.00
2,243.41

3,595.20
40.27
71.97
3,482.95
100.00
3,382.95

27.50%
-

38,400.00
(38,400.00)
19,000.00
15,000.00
4,391.00
991.00
1,000.00
(2,000.00)
(2,000.00)
(2,000.00)

2,243.41
3,382.95
1,387.00
1,324.48
3,166.67
856.41 (1,108.20)
856.41
(1,108.20)
1,108.20
1,500.00
1,650.00
1,500.00
(1,500.00) (3,150.00)
1,500.00
3,150.00
-

Opening Balance
Add: Cash Flow not Distributed
Less: Release after Senior Debt
Closing Balance

3,000
3,000.00

3,000
3,000.00

DSCR
Cash Flow for Waterfall
Debt Service
DSCR
Switch for Cash Sweep Trigger

2,243.4
1,387.0
1.62
TRUE

3,383.0
4,491.1
0.75
FALSE

Debt Balance for Sweep

19,000

14,977

(4,391.0)
(4,391.0)

25%
1.25
15%
-

25%
1.56
15%
-

(4,391.0)

Gross Equity IRR Before Rachet


Hurdle Rate
FV Factor
Terminal Value
Cash Flow for Manager Calc
Cash Flow with Hurdle Rate
Excess ot Managers
Percent to Managers
Mngr Proceeds

Remaining Cash to Equity Investors


Equity IRR

3,000

25%
1.00
0%
25%

Err:523

Cash to Senior
Senior IRR

7.3%

(19,000)

Cash to Junior
Junior IRR

3.0%

(15,000.00)

2,243

3,383

4,391

4,529

4,391

138
0
4,529

223
0
4,752

3,000
0
1,000
1,000
2,000
415
31,976

3,000
0
1,000
1,726
2,300
332
31,976

3,000
0
1,000
1,847
2,170
249
31,976

Equity Balance
Opening Balance
Add: Equity Advances
Add: Net Income
Less: Dividends
Closing Balance
Balance Sheet
Assets
Cash
Debt Service Reserve Acct
Stand-by Equity Deposit
Trade Debtors
Fixed Assets
Unamortised Fees
Goodwill

Total
Senior Debt
Mezzanine Debt
Accumulated Deferred Tax
Payables
Equity
Total

TRUE

39,391

40,334

40,242

19,000
15,000
0
1,000
4,391
39,391

18,144
16,500
11
1,151
4,529
40,334

16,085
18,150
24
1,231
4,752
40,242

0
TRUE

0
TRUE

0
TRUE

Project IRR and Free Cash Flow


EBITDA
Less; Taxes on EBIT
Less: WC Changes
Less: Capital Exenditures
Add: Deferred Tax
Add: Terminal Proceeds
Total Cash Flow
Overall IRR on Free Cash Flow

Cash Flow
Senior Debt Service
Senior Sweep
Junior Debt Service

0
38,400.00
(38,400.00)

3,360.00
869.00
575.34
500.00
11.00
1,426.66

3,595.20
925.43
40.27
100.00
12.65
2,542.15

1
Cash Flow
2,243.41
Senior Debt Service
1,387.00
Senior Sweep
856.41
Junior Debt Service -

2
3,382.95
3,382.95
-

-3.01%

J-Curve
Entry Multiple

12.00

80%
77.5%
75.0%
72.5%
70.0%
67.5%
65.0%
62.5%
60.0%
57.5%
55.0%
52.5%
50.0%
47.5%
45.0%
42.5%
40.0%
37.5%
35.0%
32.5%
30.0%
27.5%
25.0%
22.5%
20.0%
17.5%
15.0%
12.5%
10.0%
7.5%
5.0%
2.5%
0.0%
-2.5%
-5.0%
-7.5%
-10.0%
-12.5%

Equity IRR Junior IRR


2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%
2.98%

Hurdle
Match
Index

5%
#N/A
#N/A

80%
78%
75%
73%
70%
68%
65%
63%
60%
58%
55%
53%
50%
48%
45%
43%
40%
38%
35%
33%
30%
28%
25%
23%
20%
18%
15%
13%
10%
7%
5%
2%
0%
-3%

5%
#N/A
#N/A

Equity IRR Junior IRR


0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%
0%
3%

Holding Per

9.00

EBITDA Sens
5

100%
6

10

7.30%

7.30%

7.30%

7.30%

7.30%

7.30%

7.30%

7.30%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

27.50%

27.50%

27.50%

27.50%

27.50%

27.50%

27.50%

27.50%

60.00
40.00

60.00
40.00

60.00
40.00

60.00
40.00

60.00
40.00

60.00
40.00

60.00
40.00

60.00
40.00

200

200

100

100

100

100

100

100

25%
4%
25%
25%

15%
1%
10%
15%

23%
1%
10%
23%

5%
1%
5%
5%

2%
1%
3%
2%

2%
1%
3%
2%

2%
1%
3%
2%

1
9%
4%
10%
9%

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

3,200.00
1.22
100%

3,200.00
1.53
100%

3,200.00
1.76
100%

3,200.00
2.17
100%

3,200.00
2.27
100%

3,200.00
2.32
100%

3,200.00
2.37
100%

3,200.00
2.41
100%

0.40

0.34

0.34

0.20

0.18

0.21

0.19

0.20

3,918.8

4,898.5

5,633.2

6,928.9

7,275.3

7,420.8

7,569.2

7,720.6

29,390.76

12,246
60
16%
0.00

60
16%
0.00

60
16%
0.00

60
16%
0.00

60
16%
0.00

60
16%
0.00

60
16%
0.00

60
16%
0.00

40.00
11.0%
0.00

40.00
11.0%
0.00

40.00
11.0%
0.00

40.00
11.0%
0.00

40.00
11.0%
0.00

40.00
11.0%
0.00

40.00
11.0%
0.00

40.00
11.0%
0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

-615.62

0.00

0.00

0.00

0.00

0.00

0.00

0.00

New Equity Target Eq

Debt Fees

415.0

4,391.0

-6,500

Adj
(2,000)
1,000
500
415
31,976
31,891

Total
3,000
0
1,000
1,000
2,000
415
31,976
39,391

19,000
15,000
(2,109)
31,891

19,000
1,000
4,391
39,391
1

19,000
16,085
3,167
1,108
11,810
-

7.30%
1,174

19,000
-

7.30%
-

19,000
-

7.30%
-

19,000
-

7.30%
-

19,000
-

7.30%
-

19,000
-

7.30%
-

19,000
-

7.30%
-

19,000
-

7.30%
-

18,150.00
-

3,582.22
-

3,940.44
-

4,334.48
-

4,767.93
-

5,244.73
-

5,769.20
-

6,346.12
-

3,582.22
3,150.00
15,000.00
3,582.22

3,940.44
3,582.22
3,940.44

4,334.48
3,940.44
4,334.48

4,767.93
4,334.48
4,767.93

5,244.73
4,767.93
5,244.73

5,769.20
5,244.73
5,769.20

6,346.12
5,769.20
6,346.12

6,980.73
6,346.12
6,980.73

0.00%
-

0.00%
-

0.00%
-

0.00%
-

0.00%
-

0.00%
-

0.00%
-

0.00%
-

10.00%
1,815.00
1,815.00

10.00%
358.22
358.22

10.00%
394.04
394.04

10.00%
433.45
433.45

10.00%
476.79
476.79

10.00%
524.47
524.47

10.00%
576.92
576.92

10.00%
634.61
634.61

4,340.88
-

6.50%
-

6.50%
-

6.50%
-

6.50%
-

6.50%
-

6.50%
-

6.50%
-

6.50%
-

2,200
100
200
2,100
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

0
0
0
0
0

10.00%
12.00%

10.00%
12.00%

10.00%
12.00%

10.00%
12.00%

10.00%
12.00%

10.00%
12.00%

10.00%
12.00%

10.00%
12.00%

220
264

30
220
200
50
-

415

415

415

415

415

415

415

415

415

415

415

415

415

415

415

415

0.00%
-

0.00%
-

0.00%
-

0.00%
-

0.00%
-

0.00%
-

0.00%
-

0.00%
-

166
249

166
249

166
249

166
249

166
249

166
249

166
249

166
249

29,391
2,050
27,341
-

3,918.77
27,340.76
220.00
31,039.53
1,174.21
1,815.00
28,050.31
7,713.84
20,336.48

358.22
(358.22)
(98.51)
(259.71)

394.04
(394.04)
(108.36)
(285.68)

433.45
(433.45)
(119.20)
(314.25)

476.79
(476.79)
(131.12)
(345.68)

524.47
(524.47)
(144.23)
(380.24)

576.92
(576.92)
(158.65)
(418.27)

634.61
(634.61)
(174.52)
(460.09)

28,050.31
44.00
27,340.76
665.55

(358.22)
(358.22)

(394.04)
(394.04)

(433.45)
(433.45)

(476.79)
(476.79)

(524.47)
(524.47)

(576.92)
(576.92)

(634.61)
(634.61)

358.22
358.22

358.22
394.04
752.27

752.27
433.45
1,185.71

1,185.71
476.79
1,662.51

1,662.51
524.47
2,186.98

2,186.98
576.92
2,763.90

2,763.90
634.61
3,398.51

665.55

27.50%
183.03
7,713.84
7,530.81

27.50%
(98.51)
(98.51)

27.50%
(108.36)
(108.36)

27.50%
(119.20)
(119.20)

27.50%
(131.12)
(131.12)

27.50%
(144.23)
(144.23)

27.50%
(158.65)
(158.65)

27.50%
(174.52)
(174.52)

23.65
7,530.81
7,554.46

7,554.46
(98.51)
7,455.95

7,455.95
(108.36)
7,347.59

7,347.59
(119.20)
7,228.39

7,228.39
(131.12)
7,097.27

7,097.27
(144.23)
6,953.04

6,953.04
(158.65)
6,794.39

6,794.39
(174.52)
6,619.87

3,918.77
29,390.76
(615.62)
183.03
33,742.12
100.00
33,642.12

33,642.12
1,174.21
14,976.93
1,108.20
16,382.78
16,382.78
16,382.78
1,815.00
358.22
15,000.00
3,150.00
3,582.22
(3,582.22) (3,940.44)
3,582.22
3,940.44
3,000.00
3,000.00
-

394.04
433.45
3,940.44
4,334.48
(4,334.48) (4,767.93)
4,334.48
4,767.93
-

476.79
4,767.93
(5,244.73)
5,244.73
-

524.47
5,244.73
(5,769.20)
5,769.20
-

576.92
5,769.20
(6,346.12)
6,346.12
-

634.61
6,346.12
(6,980.73)
6,980.73
-

3,000
3,000.00
-

33,642.1
16,151.1
2.08
TRUE
-

TRUE

TRUE

TRUE

TRUE

TRUE

TRUE

TRUE

25%
2.44
15%
-

25%
3.05
15%
-

25%
3.81
15%
-

25%
4.77
15%
-

25%
5.96
15%
-

25%
7.45
15%
-

25%
9.31
15%
-

17,259

16,382.78

25%
1.95
29,390.76
4,391.00
8,576.2
20,814.59
15%
3,122.19

4,752

22,088

21,829

21,543

21,229

20,883

20,503

20,084

20,336
3,000
22,088

-260
0
21,829

-286
0
21,543

-314
0
21,229

-346
0
20,883

-380
0
20,503

-418
0
20,084

-460
0
19,624

0
0
1,000
0
0
249
31,976

0
0
1,000
0
0
249
31,976

0
0
1,000
0
0
249
31,976

0
0
1,000
0
0
249
31,976

0
0
1,000
0
0
249
31,976

0
0
1,000
0
0
249
31,976

0
0
1,000
0
0
249
31,976

0
0
1,000
0
0
249
31,976

33,225

33,225

33,225

33,225

33,225

33,225

33,225

33,225

3,582
7,554
0
22,088
33,225

3,940
7,456
0
21,829
33,225

4,334
7,348
0
21,543
33,225

4,768
7,228
0
21,229
33,225

5,245
7,097
0
20,883
33,225

5,769
6,953
0
20,503
33,225

6,346
6,794
0
20,084
33,225

6,981
6,620
0
19,624
33,225

0
TRUE

0
TRUE

0
TRUE

0
TRUE

0
TRUE

0
TRUE

0
TRUE

0
TRUE

3,918.77
8,535.87
(615.62)
100.00
7,530.81
29,390.76
32,820.08

(98.51)
(98.51)

(108.36)
(108.36)

(119.20)
(119.20)

(131.12)
(131.12)

(144.23)
(144.23)

(158.65)
(158.65)

(174.52)
(174.52)

10
-

3
-

Exit Multiple

4
-

5
-

Senior
7.50 Debt/Capital
J-Curve
Hold Per Equity IRR
Err:523
3
Err:523
4
Err:523
5
Err:523
6
Err:523
7
Err:523
8
Err:523
9
Err:523
10
Err:523

6
-

7
-

49.5% Mezz Debt

8
-

39%

11
12

Senior IRR Project IRR


7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%
7.30%
-3.01%

Err:523
Err:523

5%
34
-3%

5%
#N/A
#N/A

Senior IRR Project IRR


7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%
7%
0%

11

12

7.30%

7.30%

10.00%

10.00%

27.50%

27.50%

60.00
40.00

60.00
40.00

100

100

2%
1%
3%
2%

2%
1%
3%
2%

100.00

100.00

3,200.00
2.46
100%

3,200.00
2.51
100%

0.18

0.23

7,875.0

8,032.5

60
16%
0.00

60
16%
0.00

40.00
11.0%
0.00

40.00
11.0%
0.00

0.00

0.00

0.00

0.00

19,000
-

7.30%
-

19,000
-

7.30%
-

6,980.73
-

7,678.80
-

7,678.80
6,980.73
7,678.80

8,446.68
7,678.80
8,446.68

0.00%
-

0.00%
-

10.00%
698.07
698.07

10.00%
767.88
767.88

6.50%
-

6.50%
-

0
0
0
0
0

0
0
0
0
0

10.00%
12.00%

10.00%
12.00%

415

415

415

415

0.00%
-

0.00%
-

166
249

166
249

698.07
(698.07)
(191.97)
(506.10)

767.88
(767.88)
(211.17)
(556.71)

(698.07)
(698.07)

(767.88)
(767.88)

3,398.51
698.07
4,096.58

4,096.58
767.88
4,864.46

27.50%
(191.97)
(191.97)

27.50%
(211.17)
(211.17)

6,619.87
(191.97)
6,427.90

6,427.90
(211.17)
6,216.73

698.07
6,980.73
(7,678.80)
7,678.80
-

767.88
7,678.80
(8,446.68)
8,446.68
-

TRUE
-

25%
11.64
15%
-

TRUE
-

25%
14.55
15%
-

19,624

19,118

-506
0
19,118

-557
0
18,562

0
0
1,000
0
0
249
31,976

0
0
1,000
0
0
249
31,976

33,225

33,225

7,679
6,428
0
19,118
33,225

8,447
6,217
0
18,562
33,225

0
TRUE

0
TRUE

(191.97)
(191.97)

(211.17)
(211.17)

11
-

12
-

Integrity

Sources and Uses

Pro Forma

Balance Sheet

TRUE

Overall Integrity

TRUE

Rachet Example

Equity IRR
From
0%
25%

From
To
-100%
0%
10%
50%

To
25%
100%

Hurdle

Inst Inv
100%
25%
85%

Incentive
0%
5%
15%
20%

0%
10%
50%
500%

Budget Income

100

100

100

100

100

Actutal Income

80

100

110

120

150

-20%

0%

10%

20%

50%

0%
0%
3

5%
5%

15%
15%

15%
15%

20%
20%

Percentage

Mgmt
0%
15%

50%
10%
0%
-100%

6
100
150
50%
20%
20%

Goodwill Example

Assets

1000

Assets
Write-up
Goodwill

1,000
500
700

Consideration
Existing Equity
Goodwill
Less: Asset-Write-up
Goodwill
Add: Fees

Equity

1000
2,200

2,000
-1000
1,000
500
500
200

Sheet2
Err:523

48%

-1000

500

4000

0
-1000
1

1
0
1.25

2
0
1.56

3
500
1.95

Excess

4
2441.41
2.44
1558.59

Mgr Pct

779.3

IRR Hurdle

20%

Pct of Excess

50%
25%

Remiaing

-1000
41%

500

3220.7

Index

Company A
Company B
Company C
Median

9
9.5
8.5
9

Liquity Discount

25%

Terminal EV/EBITDA

6.75
1
100
a

=INDEX(G15:I17,2,3)-->

500

=INDEX(G15:G17,2)-->

100

=INDEX(G15:G17,F23)-->
2

100

2
300

3
500
c

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