LBO Modeling Questions
Hey all, I have an upcoming modeling test for a couple of MM/UMM funds and would appreciate claryifing a couple of points relating to LBO modeling:
- SBC - How to treat them in the context of an LBO? For the projection years, should I take into account any SBC? Say I have a SaaS company that historically has had ~30% of Adj. EBITDA in the form of SBC. Most of the public comps forward multiples are based on SBC adjusted EBITDA, thus there might be some distortion on entry vs exit multiples.
- Management Option Pool / Incentive Plan - I came across several methods of dealing with those but would be good to know what's the standard way of modeling those out. Say on entry sponsor owns 100% and grants 10% MIP. What proceeds does sponsor receive on exit, assuming equity value (pre MIP) is 1,000?
bump
How do you pay out SBC on a private company?
Thanks! So for SBC, I can simply ignore it (ie won't add it back to EBITDA) when analyze public comps prior to the LBO?
Aut ex illo perspiciatis natus sint. Laudantium neque non quia impedit. Ea non alias assumenda voluptatem.
Aliquam sed reprehenderit aut voluptas tenetur eos fugiat sed. Magnam expedita perferendis in sunt rerum optio blanditiis.
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...