Hi monkeys,
Short question as i have seen multiple versions of this.
Situation: Building LBO in case study with mgmt case and sponsor downside case.
Question 1: Do you always assume entry on LTM EBITDA basis?
Question 2: Imagine 2017A, 2018E, 2019E. Assuming entry on 30-Jun-2018 - it would be affected by the case selected; is this correct? Having trouble accepting that this should be correct, as 2 different entry ebitdas depending on the case
Question 3: I have also seen versions, where multiple was always selected based on the Actual year figure, so 2017
Question 4: What in general do you do to select the correct entry year and business plan years; same as ?management case in IM
THANK YOU
BananaJoe, shame nobody has responded. Maybe one of these topics will help:
If those topics were completely useless, don't blame me, blame my programmers...
please help
Q1: I have seen LTM and NTMmodels. NTM more meaningful for fast growing companies. Also NTM multiples from your listed peers are more meaningful in that case a benchmark for exit multiple.
Q2: 1H 2018 is the same for both cases I suppose. Use a stub year or fix your estimate for 2018 as a whole (majority of the cases you are not significantly going to influence the financials in the first 6 months).
Q3: I see no question. 31 Dec 2017 multiple on 30 Jun 2018 entry could make sense, depending on how comparable both years are (growth, profitbability)
Q4: see above
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