hard · Private Equity & LBOs

A sponsor buys a business at 11.0x LTM EBITDA and exits 5 years later at the same 11.0x multiple. Over the hold, EBITDA grows from $100M to $160M, net debt falls from $700M to $300M, and the sponsor's only equity contribution was at entry.

Using a returns-attribution (value-bridge) framework that decomposes the equity gain into EBITDA growth, multiple change, and debt paydown / FCF, what is the dollar contribution attributed to EBITDA growth?

$660M, the EBITDA change of $60M times the exit multiple of 11.0x; with a flat multiple this equals crediting at the entry multiple, so it is neither over- nor understated.
$1,060M, the full equity-value change, because with a flat multiple the entire gain is mechanically driven by the $60M of EBITDA growth with no separate deleveraging term.
$600M, the $60M EBITDA change times entry leverage of 10.0x net debt/EBITDA, which isolates the operational effect from the financing structure.
$60M, the raw EBITDA dollar increase, because the bridge attributes growth at 1.0x and assigns the remaining gain to the multiple and leverage terms separately.

Using a returns-attribution (value-bridge) framework that decomposes the equity gain into EBITDA growth, multiple change, and debt paydown / FCF, what is the dollar contribution attributed to EBITDA growth?

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