hard · Debt Capital Markets primary-issuance-syndication
A $1,000 million EV transaction has $600 million of debt and $400 million of equity. Fees are $40 million.
If the target company has $25 million of cash that will be kept on the balance sheet for working capital (not used for the transaction), how does this affect the S&U?
- It increases the 'Uses' and the equity check by $25 million
- It has no effect at all on the sources and uses statement
- It increases the available debt financing capacity by $25 million
- It decreases the required equity contribution check by exactly $25 million
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