Pension Liability in LBO
I'm working on a LBO analysis for a company and am having some trouble wrapping my head around how to incorporate the company's pension liability. Say a company has $10M in pension liability ($2M pension payable and $8M long term pension liability) as recorded on its balance sheet:
To calculate implied equity value (purchase price) - will it be EBITDA times Purchase Multiple less Net Debt less $10M in pension liability?
How does the pension liability affect the Sources and Uses table?
Do you typically assume that the company will pay a fixed amount to pay off the pension liability in the projected periods, and if so, is this yearly amount a deduct from the levered FCF? So the company pays off the pension payment before paying off any debt.
Much appreciated!
Voluptatem deleniti adipisci dolores est. Eos doloribus possimus ducimus ad vero ipsum repellendus placeat. Velit sed et aut cum unde consequuntur.
Et et nulla aliquid esse vel. Corporis aliquid et aut eius modi. Quis maxime laborum fugiat illo sed. Non id in accusamus excepturi ut corrupti voluptas qui.
Rem in aut iusto consequatur. Deleniti voluptatem occaecati voluptas dolore quod tempora.
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...