How does an escrow requirement impact IRR? And Valuation?

clowds's picture
Rank: Monkey | banana points 36

Putting together a buyside model. Was asked to look at returns of an investment at $50mm with $10mm cash escrow requirement. How would that affect my IRR? Would it lower initial equity investment? What about the exit? And would it change anything in my DCF?

Thnx

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Jan 22, 2014