medium · Private Equity paper-lbo
A private equity sponsor is considering a dividend recapitalization. Two years after acquisition, EBITDA has grown from $60M to $80M and debt has been paid down to $285M. The sponsor issues new debt to reach 4.5× leverage and uses the proceeds to pay a dividend.
What is the amount of the dividend distributed (ignoring transaction fees)?
- $75M
- $20M
- $125M
- $360M
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