hard · Private Equity & LBOs
An LBO transaction is entered at an 8.0x EV/EBITDA multiple with $300M of net debt and $200M of sponsor equity. At the end of Year 5, the company is sold at an 8.5x multiple. EBITDA grew from $62.5M to $85.0M, and $120M of debt was paid down.
What is the equity value creation attributable specifically to multiple expansion?
- $31.2M
- $42.5M
- $120.0M
- $180.0M
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