S&U in LBO - question
Hi guys,
Theoretical question: we're building a S&U for a company with the following characteristics:
- EV = 1000 (EV / EBITDA = 10x @ 100 EBITDA)
- We know that the company has 100 of associates and 100 of NCI, 100 of provisions in the bridge (that should stay in uses?)
- Let's say you want to refi the existing bank debt of 300
What would the Uses look like?
Thank you!
EV= 1000
Equity value: 1000 - bank debt 300 - NCI 100 - provisions 100 + associates 100 = 600
Uses: (assuming ou buy out the NCI and assuming associates treated as cash like item)
Purchase equity: 600
Net debt: 400
Total Uses: 1000
Sources: New debt + sponsor equity
what are associates and provision? are these equity like or debt like items? haven't ever hear dof them.
By combining all factors, it's not clear that associates are not part of EV. Especially in this example where EV is calculated as EBITDA (excluding income from associates) * multiple.
Uses
Purchase price shares core business = 600
Repay bank debt 300
Buy out NCI 100
Buy associates 100
Sources
Assumed provisions of 100
Buyer financing 1000
Uses doesn't balance with sources here - how does that work?
Thanks
sorry i cannot follow
what are assumed provisions? why?
and why would you buy associates?
Inventore tempora sit minima sit ut consequatur autem. Ut aut voluptas sit saepe. Quam ut consequatur velit et eos reiciendis et.
Assumenda esse aut quaerat delectus molestiae eos. Dolor ex est sed veritatis sit. Suscipit optio corporis quas amet. Nulla cumque esse quas perferendis cum nam.
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...
Deserunt voluptas asperiores reprehenderit minima odit cumque veniam. Officiis et eveniet aliquam rerum sunt quaerat. Assumenda ratione ipsa et vel ut pariatur est. Magni perferendis quidem corporis quod excepturi voluptatem voluptatem dolore. Similique rerum eligendi aut rerum.
Cupiditate autem numquam corporis earum est vel nihil ducimus. Officia illo velit officia repellat laboriosam tempora et. Voluptatem dignissimos totam consequuntur dolores in. Corporis unde vel porro earum.