SaaS LBO Assumptions
I'm trying to build an LBO model for a SaaS company from scratch and struggling to formulate debt assumptions, particularly in today's environment. What are appropriate assumptions for Debt % vs Equity % in today's environment, as well as spread above SOFR for today's SaaS LBOs?
I saw on PitchBook that Advent Raised $2.3B for the Maxar deal (35% debt). I also saw Thoma Raised a $2.6B (32.5% Debt) for Coupa's $8B Buyout, with a $2.4B Term Loan priced at SOFR + 750. Is this reflective of how much debt could be raised? What about Interest Rates? Any help would be much appreciated.
Interested
You are in the right zip code, but obviously it is going to depend on the business. For ARR loans 20-40% LTV and SOFR+600-800bps with a few points of OID is a good starting place for your analysis. I would spend time trying to understand why a business deserves to be on the higher or lower end of this range.
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