medium · Private Credit loan-structures-instruments
Apex Manufacturing is undergoing an LBO with an entry EV of 500.0 million at an 8.0× EBITDA multiple. The capital structure consists of 300.0 million in net debt and 200.0 million in sponsor equity. At exit in Year 5, EBITDA has grown to 85.0 million, the exit multiple is 8.5×, and the company has paid down 120.0 million of debt.
What is the value creation specifically attributable to multiple expansion?
- 180.0 million
- 42.5 million
- 222.5 million
- 25.0 million
Sign up free to see the explanation and track your rank →
More Private Credit loan-structures-instruments practice
- What is the blended interest rate paid by the borrower?
- What is the blended interest rate margin the borrower pays on the total facility?
- A fund manager is valuing a senior loan to a private mid-mar… — Under ASC 820, how is this
- A private credit fund is evaluating a 'Unitranche' loan for… — What is the borrower's expe
- Which group is the fulcrum?
- What is the indicative margin for the 'last-out' lender?
- What is the primary risk factor the lender evaluates?
- What is the most plausible reason for the 200 bps 'Non-Sponsor Premium'?