3-Statement LBO Stub Period Adjustment
How would you adjust a 3-statement LBO (including B/S) for a mid-year transaction?
Let's assume:
- Fiscal year: Jan-25 to Dec-25
- Transaction date: Jun-25
- Currently the model is an annual model (i.e. FY24 and FY25)
Would you:
- Roll forward the Dec-24 B/S to Jun-25 by essentially multiplying all cashflows by 50% e.g.:
- Only account for 50% of Net Income
- Assume only 50% of investments (e.g. Capex, NWC changes etc.) occur
- Only 50% of D&A occurs
- i.e. only 50% of the net cash generated
- Use the mid-year Jun-25 B/S to transact-off (i.e. for EV - EqV Bridge, S&U)
- Adjust the mid-year Jun-25 B/S for LBO impacts to get a PF Jun-25 B/S (e.g. debt refinancing, goodwill, equity write-off, capitalised financing fees etc.)
- Roll forward the PF Jun-25 B/S to Dec-25
- Resume annual model
How would you adjust the debt schedules? Would you:
- Assuming transaction mid-year at Jun-25, only 50% of the annual debt amortisation and interest expense would be accounted for?
For returns analysis, that's pretty clear to me.
Any guidance would be much appreciated! Thanks!
Ipsam vel laboriosam nihil amet. Non esse illo sint aperiam. Ullam nostrum tempora est. Eligendi omnis tenetur eaque hic molestias. Et voluptatum dolor ducimus est. Enim provident velit mollitia non distinctio. Ratione repellat earum quas et illo.
Corrupti et enim nostrum nihil. Excepturi atque maxime quo ut possimus eum. Iusto similique ipsum distinctio et ad. Doloribus voluptatem esse placeat cum provident et aut.
Et rerum et non ut placeat illum. Itaque et quo similique reiciendis mollitia. Et quo quis numquam voluptate dignissimos. Voluptate est in aut facilis. Aliquam quo hic maiores sunt recusandae accusantium aut.
Et adipisci non quibusdam adipisci voluptas ipsam. Quia nulla animi et totam possimus reiciendis. Eaque possimus numquam fugiat sed non vel minima. Aut reiciendis accusantium error eligendi et. Distinctio officiis temporibus sed.
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...