Investment CaseQuestion 1 of 4
Read the scenario below and answer the questions
Company Overview
BuildCo Services provides maintenance services for commercial buildings.
- •LTM Revenue: $300M
- •LTM EBITDA: $45M (15% margin)
- •Business profile: recurring service contracts, labor-heavy cost base
Transaction
- •Entry multiple: 9.0x EBITDA
- •Enterprise Value (EV): 9.0 × 45 = $405M
- •Debt: 4.5x EBITDA = $202.5M (assume $202.5M)
- •Equity: EV - Debt = $202.5M
- •Hold: 5 years
- •Exit multiple: 9.0x EBITDA (no expansion)
Operating Assumptions
- •EBITDA grows 6% per year (margin stays flat)
Simplifying Debt Assumption
Assume exit net debt is $120M after paydown by Year 5.
Numeric AnswereasyLBO
What is Year 5 EBITDA if EBITDA grows 6% per year from $45M (in $M)?
Enter EBITDA in $M (e.g., 55)
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