hard · Private Equity & LBOs
A sponsor is calculating the 'LBO Floor' for a target with $40M EBITDA. They require a20%IRR over 5 years (2.5xMOIC). They assume an exit at8.0xEBITDA with5%annual growth and $60M in debt paydown.
If total debt capacity at entry is $200M, what is the maximum Enterprise Value they can pay?
- $344M
- $332M
- $400M
- $307M
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