Why do you need valuation in recapitalization pitches?

Good explanation

throed yung playa:

It sounds like you're confusing equity and debt recaps.

For an equity recap, the answer is pretty obvious. If I'm recapitalizing a company with my equity dollars, I want to know how much of the business I'm going to own after I've contributed my $$$. In order to determine that, I need to value the business.

On the other hand, if I'm an existing equity owner and I'm considering recapitalizing my business with some debt, I won't show detailed valuation metrics in presentations to prospective lenders. I will just show some basic leverage ratios that emphasize my ability to repay the amount of debt that I am requesting. Lenders will still consider EBITDA, though, as it is generally used as a proxy for operating cash flow in the mind of a lender. They like seeing that you have a level of EBITDA to support your fixed charges (to a lender, fixed charges generally mean ttm interest expense plus current maturities of long-term debt).

Thanks. Does this mean that you'd typically include a 1 pgr on valuation in debt refinancing pitches simply to have back pocket? Thinking simply due to potential for M&A during pitch if investor isn't a pure debt investor. Otherwise, are you saying for debt pitches you typically don't include ANY valuation pages at all?

Thanks