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Year 0 1 2 3 4 5 6
Sales 57
EBITDA 9.5
Sales growth 10% 10% 8% 8% 8% 4%
EBITDA margin 16% 17% 18% 18% 18% 18%
Inventory % of sales 10% 10% 10% 10% 10% 10%
Receivables % of sales 17% 17% 17% 17% 17% 17%
Payables % of sales 20% 20% 20% 20% 20% 20%
Other current liabilities % of sales 8% 8% 8% 8% 8% 8%
Capex % of sales 5% 5% 5% 5% 5% 4%
tax rate 28% 28% 28% 28% 28% 28%
Depreciation 1.5 1.5 1.5 1.5 1.5 1.5
Term Loan Repayment -1 -1 -1 -1 -1
Balance Sheet Check 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Computing IRR
Net Income 3.16224 4.467528 5.765593 6.62428 7.544751 8.038349
Add: Depreciation 1.5 1.5 1.5 1.5 1.5 1.5
Less: Net Investment -6.72 2.88 3.16 3.63 3.92 3.39
Exit Value 0 0 0 0 125.1106 0
Initial Investment -15
Less: Repayment of Debt -1 -1 -1 -1 -1 0
FCFE -15.00 -3.06 7.85 9.43 10.75 137.08 0.00
IRR 67%
Exit Assumptions
7 8 9 10
Exit Year 5
Exit EBITDA Multiple 8
4% 4% 4% 4%
18% 18% 18% 18% Investor Warrants
10% 10% 10% 10% (exercisable at exit)
17% 17% 17% 17% # shares 4000
20% 20% 20% 20% Strike Price ($) 385.7
8% 8% 8% 8% Strike Cost 1.5428
4% 3% 3% 3% Investors fully diluted share count
28% 28% 28% 28% Total fully diluted shares count
1.5 1.5 1.5 1.5 Investors equity stake (FD basis)
(FD: fully diluted)
0 0 0 0
0.00 0.00 0.00 0.00
Debt Assumptions
Debt Quantum Tenor Rate of Interest
Management Options Term Loan A 5 5 12%
exercisable at exit Loan Stock 9 9 20%
# shares 5000
Strike Price 385.7
Strike Cost 1.9285
Management FD shares count 5000
Management stake (FD basis) 4.10%
Sources and Uses Inputs
Uses
Excess Cash 10
Refinancing Existing Term Loan 22
Fees 1
Total 33
Sources
Ordinary shares 15
Loan stock 18
Total 33
Pre-deal Adjustments Post-deal
Fixed Assets Additions Subtrations
Tangible Assets 27.9 27.9
Financial Assets 9.5 9.5
Investment in Joint Ventures 1.1 1.1
Intangibles 0.1 0.1
Transaction Goodwill 0 0
Transaction Costs 0 1 1
Total Fixed Assets 38.6 39.6
Current Assets
Inventory 5.5 5.5
Receivables 30.4 30.4
Cash -2.4 10 7.6
Total Current Assets 33.5 43.5
Current Liabilities
Payables 12.1 12.1
Other Current Liabilities 15.8 15.8
Tax Payable 0 0
Total Current Liabilities 27.9 27.9
Equity
Ordinary shares 9 15 24
Retained Earnings 8.2 8.2
Total Equity 17.2 32.2