Management and sellers notes
Hi there. I saw a recent question here where I could not find the answer and was hoping you could help. The transaction is being funded with a 1.0x contingent seller note. this note is assumed to be paid out in full (at exit) if seller meets a certain ebitda target at exit, and is payed out at a certain % between a range of EBITDAs. Does this show up on S&U? Also how would you model out this note at exit if the target is hit / not hit. If it is not hit does it turn into sponsor equity or how does that affect sponsor returns ?
Do you have any tipps where I can find Excel lbo models with management notes and sellers notes? Many thanks!!
Anne
If I understood your question correctly, you are buying a company with vendor financing and an earn out structure - I think this post could answer your question https://www.wallstreetoasis.com/forums/how-do-you-model-an-earn-out-in-…
Not sure where you can find modelling practice specifically on vendor financing, because it is mostly just modelled like other debt financing items, the only difference is that it is a non-cash item.
Aperiam ipsa ut ut assumenda vitae voluptas aut saepe. Laudantium quos sunt dolor doloremque. Explicabo architecto explicabo ullam pariatur nobis quia ullam quasi.
Et ducimus dignissimos quas ullam. Rerum vitae quis quis corporis minus ea. Quam incidunt corrupti necessitatibus tenetur enim nisi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...