M&A Strategy with Rollover Component

It's not that streamlined, but for each add-on with rollover, I would usually do these steps:

• Assess FMV enterprise value of existing company (pre-add on) --> Back out net debt to get to equity value (memo: this equity value will not be the same as your book equity value unless you're holding your FMV at-cost)
• Align on cash-free debt-free enterprise value (AKA equity value since debt-free) for add-on
• Create new cap table with FMV of existing equity in asset plus equity value of the add-on --> Impute implied % ownerships
• For example, you paid $50M for your current platform ($35M equity / $15M net debt) but can reasonably assert FMV of $75M --> FMV equity value is $60M ($75 less $15M net debt)
• The add-on is $10M --> If illustratively it's 100% rollover, your new cap table would be $60M associated with your platform and $10M associated with shareholders of the add-on, so your fund would now own 85.7% and the rollover shareholders would own 14.3% (keeping in mind your fund is likely benefitting because you "marked up" your original equity here from $35 to $60; this works as long as you can support the FMV mark for your platform based on current size and implied multiple)