Hello everyone,
For LBO Models, say the origination date the company has an EBITDA of A and Adjusted EBITDA of B.
When determining the financing assumptions, we assume a 4x EBITDA on Term Loan; The 4 times should be based upon EBITDA or Adjusted EBITDA?
Thanks!
| +72 | Does anyone believe their firm has a true competitive edge | 36 | 1d |
| +42 | Lateraling at senior associate / VP level | 11 | 3d |
| +27 | Do you regret doing PE? | 20 | 6h |
| +26 | Ares buying LGP...now what? | 8 | 11h |
| +25 | Imposter Syndrome: PE to Publics | 4 | 1d |
| +19 | Do PE VPs Always Have An Associate Under Them? | 12 | 8h |
| +17 | Francisco Partners Fundraise | 6 | 1d |
| +16 | GTCR vs BDT MSD vs MDP | 14 | 44m |
| +14 | Hours at MF Infra Funds in London | 1 | 16h |
| +14 | Setting the right LBO entry multiple without information | 3 | 3d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Adjusted EBITDA, not the reported EBITDA, is what you typically base the leverage off of.
NTM Pro Forma Run-Rate Community Adj. EBITDA
Adam Neumann, is that you?
No way you are an analyst 2 in IB asking that question
I disagree with the poster above; the leverage docs I’ve negotiated were typically done on a LTM reported EBITDA basis. Usually, adjusted EBITDA is permitted for covenant testing (depending on how well the company is performing, what the leverage multiple is), but typical LBO financings are done off of reported EBITDA numbers.
Agree it’s typically done on LTM but you can for sure adjust the numbers. If you’re not then you’re missing a trick…
What size is your fund?
Quidem nesciunt aperiam repellendus qui veniam. Est explicabo saepe velit eligendi expedita omnis incidunt. Assumenda laudantium enim provident et quia aut. Ab dolorem aut totam vel qui consequuntur vel. Quo ea sapiente cumque sint nihil voluptatem dolor. Molestiae excepturi consectetur nihil nobis repellat sint quo temporibus.
Vel quod soluta expedita veritatis. Unde et ut saepe numquam id excepturi. Expedita ut et aspernatur magnam reiciendis necessitatibus expedita. Occaecati non est omnis cumque porro.
Natus id temporibus facere rerum. Reprehenderit inventore pariatur repellendus.
Non nemo porro non eligendi. Corrupti error provident molestias et nesciunt.
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...