EV and sources and uses (question)
Hey guys,
Got asked this question recently. Why does EV vary from the sum obtained on the sources and uses table?
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Transaction fees for one. Always gotta pay the bankers!
Also, it's not necessarily required to refinance target debt.
1 and #2 already mentioned by gbs93 nevertheless some expanded explanation:
Because you might not need to refinance existing debt (or maybe you choose to refinance part of it, e.g. we just closed the investment where we refinanced senior debt but left intact junior because in nearest two years prepayment penalties for junior are huge)
Because there are transaction costs
- fees you need to pay to your M&A and due diligence and legal advisors) - upfront fees on the new debt you raise and also other financial instruments (e.g. interest rate swaps if you buy those)
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