medium · Private Equity & LBOs
An LBO deal involves a platform bought at 10.0x EBITDA ($40.0M EBITDA) and a bolt-on bought at 6.0x EBITDA ($10.0M EBITDA).
If the sponsor aims for an exit multiple of 10.0x for the combined business in 5 years, how much value was created solely by the multiple arbitrage of the bolt-on?
- $20.0M
- $100.0M
- $40.0M
- $60.0M
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