medium · Private Equity value-creation
A sponsor is considering an add-on acquisition for a platform company. The platform was acquired at 10.0x EBITDA. The add-on is being priced at 6.0x EBITDA.
If the platform has $100M in EBITDA and the add-on has $20M, and the combined entity exits at 10.0x, what is the 'Multiple Arbitrage' value created?
- 200M
- 80M
- 40M
- 120M
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