medium · Private Credit underwriting-credit-analysis
A portfolio company is acquired in an LBO for 500.0m (Entry EV) at an 8.0× EBITDA multiple. The transaction is funded with 300.0m of net debt. Five years later, the company is sold at an 8.5× multiple on an exit EBITDA of 85.0m, having paid down 120.0m of debt.
What is the value created solely from multiple expansion?
- 31.25m
- 222.5m
- 42.5m
- 25.0m
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