Company K: What is the MoM and IRR over a 3-year hold?

paper-lbo

You acquire Company K at the end of 2024.

Revenue is $150mm in 2025, growing by $25mm annually.

EBITDA margin is 20%. D&A is $15mm annually. CapEx is $8mm annually.

No change in NWC. Tax rate is 50%.

Initial leverage is 4.0x 2025E EBITDA at a 5% interest rate.

All generated cash pays down debt at exit.

Entry multiple is 8.0x 2025E EBITDA and exit is at 8.0x LTM EBITDA. What is the MoM and IRR over a 3-year hold?

Paper LBO, 10:00 on the clock

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