Need help in LBO Task
I got a task with distressed asset company. The task is to value entry value and exit value.
The issue is that exit value lower than entry. Exit and entry multiple are the same.
I developed a model but cant figure out why entry value higher than exit value.
Can anyone help?
Not sure how that's possible unless you're underwriting either (i) the business declines (i.e., EBITDA at entry is greater than EBITDA at exit) --> Suggests too conservative of a case (or that this deal is horrible and you'll lose money) OR 2) you're buying in on a revenue multiple and the revenue and/or margin growth isn't enough to achieve a commensurate EBITDA-based exit EV.
Yep, You are right!
Is it suitable if i sent in private messages my FM?
Sure, but if it's for an interview/model test (assume yes), I'm not going to meddle there.
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