Off-balance sheet debt-like items in LBO

Hi guys,

I came across an LBO case study with Debt-like items of $100mm in instructions. Balance sheet provided but no hint of valuation. I've figured I have to calcuate EV (equity+net debt+$100 of these off-balance sheet debt-like items) and divide by LTM EBITDA to arrive at multiple. But that doesn't work as now my goodwill (Equity purchase price less BS equity net of goodwill) is off because by instruction sponsor check is supposed to be 30% of the price and price includes off-balance sheet items...

Sorry if too confusing - my question essentially is - what could be some examples of these off-balance sheet items as I can't think of anything that wouldn't appear on BS?

Also - how do they affect valuation?

Thanks a lot!

4 Comments
 

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