medium · Private Equity paper-lbo
A leveraged buyout of SoftwareCo is modeled with $100M of entry EBITDA and a 10.0x entry multiple ($1.0B EV). The sponsor uses 5.0x leverage ($500M debt) and expects to exit in 5 years at a 10.0x multiple with $150M EBITDA.
If the debt is paid down to $300M at exit, what is the sponsor's Multiple on Invested Capital (MoIC)?
- 3.0x
- 1.8x
- 2.4x
- 2.0x
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