Acquisition Model
This is not something I have done in the past and I will not waste time giving a lot of specifics as to how I received the instructions, but I am looking to build a simple acquisition model and I would appreciate any initial guidance.
Assume that your fund is looking to acquire x% in a company, and you are given the financial data for your target company (revenues, EBITDA, working capital, capex in one year, tax rate, book value of debt with amortization over 20 years and interest rate of 5%, book value of fixed assets with amortization over 25 years, zero cash in initial year) and the acquisition structure (EBITDA acquisition multiple, acquisition date, partial debt facility with 1) bullet repayment in 5 years, 2) interest rate Euribor 1Y (debt is swapped) + 600 bp and 3) covenant DSCR > 1.2x).
What should the model look like conceptually if the target company and acquisition structure are the main components? I have also not modeled debt facilities before and need to check how covenants work, for example. What is the best source to get a grasp of the basics?
Thanks a lot.
Which parts do you have questions on?
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