LBO

x Assumptions
Entry ($MM) Financials
LTM EBITDA 250 LTM Financials
EBITDA Multiple 10.0x Revenue 1000
Enterprise Value 2,500 EBITDA 250
Existing Net Debt 500 D&A 50
Equity Value 2,000 Capex 75
NWC 100
Fees & Expenses 50
Operating Assumptions
Exit ($MM) Revenue Growth 7.0%
EBITDA Multiple 10.0x YoY margin expansion 1.0%
Tax Rate 21.0%

x Sources and Uses

Sources Uses
Amount xEBITDA % Capital
Bank Debt
Senior Notes
Total Debt

Sponsor Equity

Total Sources

x Financials
Operating Model Year 0 Year 1
Revenue
% growth

EBITDA
% sales

EBIT
% sales

Interest

EBT
% sales
 Taxes
% tax rate

Net Income
% sales

x Cash flow Items Year 0 Year 1

D&A
% sales

Net Working Capital

% sales
Change in Net Working Capital

CapEx
% sales

x Levered Cash Flow Year 0 Year 1

Net Income
D&A
CapEx
Change in NWC
Levered Cash Flow

x Debt Schedule
Year 0 Year 1
Bank Debt
Beginning Balance
Interest
Paydown
Ending Balance

Sr. Notes
Beginning Balance
Interest
Paydown
Ending Balance

Total Debt
Beginning Balance
Interest
Paydown
Ending Balance
x IRR
EBITDA at Exit
Exit Multiple
Enterprise Value
Net Debt
Sponsor Equity Value

Sponsor Equity at Entry

MOIC
x IRR
Capital Structure Amount Cost
Bank Debt 4.0x 6.0%
Senior Notes 2.0x 12.0%

For Reference
IRR 0.0%

Amount xEBITDA % Capital

Year 2 Year 3 Year 4 Year 5

Year 2 Year 3 Year 4 Year 5

Year 2 Year 3 Year 4 Year 5

Year 2 Year 3 Year 4 Year 5

 Answer Key
x Assumptions
Entry ($MM) Financials
LTM EBITDA 250 LTM Financials
EBITDA Multiple 10.0x Revenue 1000
Enterprise Value 2,500 EBITDA 250
Existing Net Debt 500 D&A 50
Equity Value 2,000 Capex 75
NWC 100
Fees & Expenses 50
Operating Assumptions
Exit ($MM) Revenue Growth 7.0%
EBITDA Multiple 10.0x YoY margin expansion 1.0%
Tax Rate 21.0%

x Sources and Uses

Sources Uses
Amount xEBITDA % Capital
Bank Debt 1,000 4.0x 39.2% Debt Retirement
Senior Notes 500 2.0x 19.6% Equity Payment
Total Debt 1,500 6.0x 58.8%
Fees and Expenses
Sponsor Equity 1,050 4.2x 41.2%

Total Sources 2,550 10.2x 100.0% Total Uses

x Financials
Operating Model Year 0 Year 1
Revenue 1,000 1,070
% growth 7.0%

EBITDA 250 278

% sales 25.0% 26.0%

EBIT 200 225

% sales 20.0% 21.0%

Interest 120

EBT 105
% sales 9.8%
 Taxes 22
% tax rate 21.0%

Net Income 83
% sales 7.7%

x Cash flow Items Year 0 Year 1

D&A 50 54
% sales 5.0% 5.0%

Net Working Capital 100 107

% sales 10.0% 10.0%
Change in Net Working Capital 7

CapEx 75 80
% sales 7.5% 7.5%

x Levered Cash Flow Year 0 Year 1

Net Income 83
D&A 54
CapEx 80
Change in NWC 7
Levered Cash Flow 49

x Debt Schedule
Year 0 Year 1
Bank Debt
Beginning Balance 1,000
Interest 60
Paydown 49
Ending Balance 1,000 951

Sr. Notes
Beginning Balance 500
Interest 60
Paydown 0
Ending Balance 500 500

Total Debt
Beginning Balance 1,500
Interest 120
Paydown 49
Ending Balance 1,500 1,451
x IRR
EBITDA at Exit
Exit Multiple
Enterprise Value
Net Debt
Sponsor Equity Value

Sponsor Equity at Entry

MOIC
x IRR
Capital Structure Amount Cost
Bank Debt 4.0x 6.0%
Senior Notes 2.0x 12.0%

For Reference
IRR 25.0%

Amount xEBITDA % Capital

500 2.0x 19.6%
2,000 8.0x 78.4%

50 0.2x 2.0%

2,550 10.2x 100.0%

Year 2 Year 3 Year 4 Year 5

1,145 1,225 1,311 1,403
7.0% 7.0% 7.0% 7.0%

309 343 380 421

27.0% 28.0% 29.0% 30.0%

252 282 315 351

22.0% 23.0% 24.0% 25.0%

117 113 107 100

135 169 207 251

11.8% 13.8% 15.8% 17.9%
 28 35 44 53
21.0% 21.0% 21.0% 21.0%

107 133 164 198

9.3% 10.9% 12.5% 14.1%

Year 2 Year 3 Year 4 Year 5

57 61 66 70
5.0% 5.0% 5.0% 5.0%

114 123 131 140

10.0% 10.0% 10.0% 10.0%
7 8 9 9

86 92 98 105
7.5% 7.5% 7.5% 7.5%

Year 2 Year 3 Year 4 Year 5

107 133 164 198
57 61 66 70
86 92 98 105
7 8 9 9
70 95 123 154

Year 2 Year 3 Year 4 Year 5

951 881 786 663

57 53 47 40
70 95 123 154
881 786 663 509

500 500 500 500

60 60 60 60
0 0 0 0
500 500 500 500

1,451 1,381 1,286 1,163

117 113 107 100
70 95 123 154
1,381 1,286 1,163 1,009
 421
10.0x
4,208
1,009
3,198

1,050

3.0x
25.0%