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Operational Inputs

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

Sales 57 62.70 68.97 74.49 80.45 86.88 90.36


EBITDA 9.5 10.03 11.72 13.41 14.48 15.64 16.26
Depreciation 1.50 1.50 1.50 1.50 1.50 1.50
EBIT 8.53 10.22 11.91 12.98 14.14 14.76

Interest 4.14 4.02 3.90 3.78 3.66 3.60


PBT 4.39 6.20 8.01 9.20 10.48 11.16

Tax 1.23 1.74 2.24 2.58 2.93 3.13


Net Income 3.16 4.47 5.77 6.62 7.54 8.04

Opening Term Loan 5.00 4.00 3.00 2.00 1.00 0.00


Add: Drawdown 0.00 0.00 0.00 0.00 0.00 0.00
Less: Repayment -1.00 -1.00 -1.00 -1.00 -1.00 0.00
Closing Term Loan 5 4.00 3.00 2.00 1.00 0.00 0.00

Opening Loan Stock 18.00 18.00 18.00 18.00 18.00 18.00


Add: Drawdown 0.00 0.00 0.00 0.00 0.00 0.00
Less: Repayment 0.00 0.00 0.00 0.00 0.00 0.00
Closing Loan Stock 18 18.00 18.00 18.00 18.00 18.00 18.00

Interest on Term Loan 0.54 0.42 0.30 0.18 0.06 0.00


Interest on Term Stock 3.60 3.60 3.60 3.60 3.60 3.60

Capex 3.14 3.45 3.72 4.02 4.34 3.61


Net Fixed Assets 39.60 41.24 43.18 45.41 47.93 50.77 52.89

Inventory 5.50 6.27 6.90 7.45 8.04 8.69 9.04


Receivables 30.40 10.66 11.72 12.66 13.68 14.77 15.36
Cash 7.60 17.98 20.07 23.17 26.67 30.79 36.94
Payable 12.10 12.54 13.79 14.90 16.09 17.38 18.07
Other current liabilities 15.80 5.02 5.52 5.96 6.44 6.95 7.23

Tax Payable 0.00 1.23 1.74 2.24 2.58 2.93 3.13

Ordinary Shares 24.00 24.00 24.00 24.00 24.00 24.00 24.00


Retained Earnings 8.20 11.36 15.83 21.60 28.22 35.76 43.80

Total Assets 83.10 76.15 81.88 88.69 96.32 105.03 114.23


Total liabilities 83.10 76.15 81.88 88.69 96.32 105.03 114.23

Balance Sheet Check 0.00 0.00 0.00 0.00 0.00 0.00 0.00

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: Increase in Inventories -0.77 -0.63 -0.55 -0.60 -0.64 -0.35
Less: Increase in Receivables 19.74 -1.07 -0.94 -1.01 -1.09 -0.59
Add: Increase in Payables 0.44 1.25 1.10 1.19 1.29 0.70
Add: Increase in Other Current Laibilities -10.78 0.50 0.44 0.48 0.51 0.28
Add : Increase in Tax Payable 1.23 0.51 0.50 0.33 0.36 0.19
Total 14.519 6.53784 7.825572 8.517804 9.467069 9.765057

Capex -3.14 -3.45 -3.72 -4.02 -4.34 -3.61

Cash Flow from Financing Activities


Less: Repayment of Term Loan -1.00 -1.00 -1.00 -1.00 -1.00 0.00
Less: Repayment of Loan Stock 0.00 0.00 0.00 0.00 0.00 0.00
Total -1 -1 -1 -1 -1 0

Opening cash 7.60 17.98 20.07 23.17 26.67 30.79


Add: Net change in cash 10.38 2.09 3.10 3.50 4.12 6.15
Closing cash 7.60 17.98 20.07 23.17 26.67 30.79 36.94

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)

93.97 97.73 101.64 105.71


16.91 17.59 18.30 19.03
1.50 1.50 1.50 1.50
15.41 16.09 16.80 17.53

3.60 3.60 1.80 0.00


11.81 12.49 15.00 17.53

3.31 3.50 4.20 4.91


8.51 8.99 10.80 12.62

0.00 0.00 0.00 0.00


0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00

18.00 18.00 18.00 0.00


0.00 0.00 0.00 0.00
0.00 0.00 -18.00 0.00
18.00 18.00 0.00 0.00

0.00 0.00 0.00 0.00


3.60 3.60 1.80 0.00

3.76 2.93 3.05 3.17


55.15 56.58 58.13 59.80

9.40 9.77 10.16 10.57


15.98 16.61 17.28 17.97
43.41 51.20 43.19 54.88
18.79 19.55 20.33 21.14
7.52 7.82 8.13 8.46

3.31 3.50 4.20 4.91

24.00 24.00 24.00 24.00


52.31 61.30 72.10 84.72

123.93 134.17 128.76 143.22


123.93 134.17 128.76 143.22

0.00 0.00 0.00 0.00

8.506763 8.993913 10.79655 12.61945


1.5 1.5 1.5 1.5
-0.36 -0.38 -0.39 -0.41
-0.61 -0.64 -0.66 -0.69
0.72 0.75 0.78 0.81
0.29 0.30 0.31 0.33
0.18 0.19 0.70 0.71
10.22507 10.72095 13.03667 14.86901

-3.76 -2.93 -3.05 -3.17

0.00 0.00 0.00 0.00


0.00 0.00 -18.00 0.00
0 0 -18 0

36.94 43.41 51.20 43.19


6.47 7.79 -8.01 11.70
43.41 51.20 43.19 54.88

8.506763 8.993913 10.79655 12.61945


1.5 1.5 1.5 1.5
3.54 2.70 2.31 2.42
0 0 0 0

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

Total Assets Less Current Liabilities 44.2 55.2

Net Current Assets 5.6 5.6

Long Term Liabilities


Term Loan A 27 -22 5
Loan Stock 0 18 18
Total Long term liabilities 27 23

Equity
Ordinary shares 9 15 24
Retained Earnings 8.2 8.2
Total Equity 17.2 32.2

Balance sheet check 0 0