9. What is the adjustment amount for identifiable assets? (Round to the nearest integer

6,875

7,312

10,691

9,243

10. What is the total debt/EBITDA in 2022 in the base case?

1.9x

1.3x

1.7x

1.5x

11. What is the amount of cash available after revolver pay down in 2023 in the base case?

-2,609

-11,972

-20,175

0

12. What is the closing balance for term loan 1 in 2021?

37,800

39,600

0

32,400

13. What is the pro forma closing balance of cash?

71,806

10,000

16,000

78,237

14. What is the unlevered free cash flow in 2024 in the base case?

23,611

29,412

37,761

24,674

15. What is the terminal enterprise value in the upside case?

241,608

211,286

224,653

269,964

16. The sponsor IRR for the upside case is __________

30.5%

32.1%

32.4%

35.6%

17. What is the NPV of equity value in the base case (assuming the discount rate is the same as the IRR)?

45,586

38,640

42,197

63,940

18. In the downside case, what is the sponsor IRR if the entry EV/EBITDA is 6.5x and the exit EV/EBITDA is 6.0x?

16.0%

14.2%

17.6%

18.1%

19. What is the investor IRR from term loan 1?

4.7%

4.3%

5.8%

5.2%

20. In the base case, what is the sponsor cash-on-cash return if the debt/EBITDA for term loan 1 is 1.75x and the debt/EBITDA for term loan 2 is 2.00x? (Round to one decimal place)

5.8

4.5

5.7

5.0

Live Case -> Sponsor IRR-> Error Checks -> $ Value % of Total Financing Fee Coupon Mandatory Principal Repayment (Loan Amortization) Year 2 Year 3 Year 4 Year 5 Sweep Year 1 Year 6 Yea LBO Model for Company Inc. -8 -9 Financing 0 1 Type X EBITDA 2 Cash (target) 3 Line of Credit 0.30x -4 Term Loan 1 1.80x 5 Term Loan 2 2.20x 6 Sub Debt 1 0.50x 7 Sponsor Equity 8 Total -9 9 FO 1 Sources & Uses of Cash 2 Sources of Cash -3 -4 5 56 7 1.8% 1.8% 1.8% 1.8% 0.9% 2.5% 5.0% 7.5% 10.0% na na 50.0% 50.0% 0.0% na 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 60.0% 10.0% 0.0% 0.0% 0.0% 0.0% 50.0% 0.0% 0.0% 0.C 0.C 0.C 100. 0. Uses of Cash Cash Consideration Stock Consideration Target Debt - Replace Debt Financing Fees Equity Financing Fees Other Closing Costs Total Uses Book Value Fair Value Adjustment -9 Total Sources 0 1 2 Goodwill and Purchase Price Allocation 3 Fair Market Value -4 Cash 5 Accounts Receivable -6 Inventory 7 Property, Plant & Equipment -8 Identifiable Intangibles 9 Identifiable Assets 0 0 =1 4,500 5,800 29,000 Purchase Price Allocation Total Purchase Price Net Book Value of Assets Excess Purchase Price Write-off Existing Goodwill Fair Value Adjustments Excess Purchase Price After Adjustments Goodwill Live Case -> Sponsor IRR-> Error Checks -> $ Value % of Total Financing Fee Coupon Mandatory Principal Repayment (Loan Amortization) Year 2 Year 3 Year 4 Year 5 Sweep Year 1 Year 6 Yea LBO Model for Company Inc. -8 -9 Financing 0 1 Type X EBITDA 2 Cash (target) 3 Line of Credit 0.30x -4 Term Loan 1 1.80x 5 Term Loan 2 2.20x 6 Sub Debt 1 0.50x 7 Sponsor Equity 8 Total -9 9 FO 1 Sources & Uses of Cash 2 Sources of Cash -3 -4 5 56 7 1.8% 1.8% 1.8% 1.8% 0.9% 2.5% 5.0% 7.5% 10.0% na na 50.0% 50.0% 0.0% na 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 60.0% 10.0% 0.0% 0.0% 0.0% 0.0% 50.0% 0.0% 0.0% 0.C 0.C 0.C 100. 0. Uses of Cash Cash Consideration Stock Consideration Target Debt - Replace Debt Financing Fees Equity Financing Fees Other Closing Costs Total Uses Book Value Fair Value Adjustment -9 Total Sources 0 1 2 Goodwill and Purchase Price Allocation 3 Fair Market Value -4 Cash 5 Accounts Receivable -6 Inventory 7 Property, Plant & Equipment -8 Identifiable Intangibles 9 Identifiable Assets 0 0 =1 4,500 5,800 29,000 Purchase Price Allocation Total Purchase Price Net Book Value of Assets Excess Purchase Price Write-off Existing Goodwill Fair Value Adjustments Excess Purchase Price After Adjustments Goodwill Live Case -> Sponsor IRR -> Error Checks -> Close 2018F 2019F 2020F 2021F 2022F 2023F 2024F LBO Model for Company Inc. 2 Credit Metrics 4 5 6 Short Term Debt =7 Long Term Debt 8 Total Debt 9 10 Cash 1 Net Debt 2 12 13 Interest Expense 4 Principle Repayments 15 Total Debt Service 16 17 EBIT 18 EBITDA 19 EBITDA - Capex 0 Fixed Charges 11 2 Total Debt EBITDA Net Debt/EBITDA 14 EBIT/Interest 5 Debt Service Coverage (EBITDA) / (Interest + Principle) 16 Debt Service Coverage (EBITDA - Capex)/(Interest + Principle) 7 Fixed Charge Coverage (EBITDA - Capex - Taxes ) / (Interest + Principle) 18 19 Income Statement 1 2014A 2015A 2 3 Revenue 76,814 78,915 Cost of Goods Sold (COGS) 30,726 32,510 5 Gross Profit 46,088 46,405 6 Marketing, Advertising & Promotion 11,138 11,577 8 & General & Administrative 7,588 7,960 9 EBITDA 27,362 26,868 C0 -1 Depreciation & Amortization 1 11,558 10,689 -2 EBIT 15,804 16,179 -3 -4 Interest 2,000 2,000 -5 Current Taxes 2,880 3,080 -6 Net Earnings 10,924 11,099 -7 2016A 2017A 2018F 2019F 2020F 2021F 2022F 2023F 2024F 80,138 33,849 46,289 84,412 35,416 48,996 12,229 8,007 26,053 13,688 8,536 26,772 9,577 16,476 9,577 17,195 1,250 3,370 11,856 1,250 3,455 12,490 Live Case -> Sponsor IRR-> Error Checks -> LBO Model for Company Inc. Balance Sheet 2014A 2015A 2016A 2017A 2018F' 2019F 2020F 2021F 2022F 2023F 2024F 47,992 3,546 4,507 56,045 27,153 60,532 3,589 5,050 69,171 25,264 63,122 3,989 6,513 73,624 23,487 78,237 4,010 6,268 88,515 21,710 83,198 94,435 97,111 110,225 2 Assets 3 Cash + Accounts Receivable 5 Inventory Current Assets Property & Equipment 3 Goodwill e Total Assets ) 1 Liabilities 2 Short Term Debt 3 Accounts Payable Current Liabilities 5 Long Term Debt Total Liabilities Shareholder's Equity B| Equity Capital Retained Earnings Shareholder's Equity Total Liabilities & Shareholder's Equity 2 3 Check 2,761 2,761 35,011 37,772 2,899 2,899 35,011 37,910 2,920 2,920 25,810 28.730 3,544 3,544 25,810 29,354 43,500 1.926 45,426 83,198 43,500 13,025 56,525 94,435 43,500 24,881 68,381 97,111 43,500 37,371 80.871 110,225 2014A 2015A 2016A 2017A 2018F 2019F 2020F 2021F 2022F 2023F 2024F 5 Cash Flow Statement 7 3 Operating Cash Flow Net Earnings Plus: Depreciation & Amortization Less: Changes in Working Capital 3 Cash from Operations 10,924 11,558 5,292 17,190 11,099 10,689 448 21,340 11,856 9,577 1,842 19,591 12,490 9,577 (848) 22,915 (8,800) (8,800) (7,800) (7,800) (8,800) (8,800) (7,800) (7,800) 19,201) Investing Cash Flow Investments in Property & Equipment Investments in Businesses Cash from Investing 3 Financing Cash Flow Issuance of Debt line of credit) Repayment of Debt 3 Issuance of equity # Repurchase of equity 5 Payment of Dividends Cash from Financing 7 Net Increase (decrease) in Cash Opening Cash Balance Closing Cash Balance 39,602 39,602 (9,201) 47,992 12,540 47,992 60,532 2,590 60,532 63,122 15,115 63,122 78,237 47,992 LBO Model for Company Inc. Live Case -> Sponsor IRR-> Error Checks -> Cash Flow Statement 2014A 2015A 2016A 2017A 2018F 2019F 2020F 2021F 2022F 2023F 2024F Operating Cash Flow Net Earnings Plus: Depreciation & Amortization Less: Changes in Working Capital Cash from Operations 10,924 11,558 5,292 17,190 11,099 10,689 448 21,340 11,856 9,577 1,842 19,591 12,490 9,577 (848) 22,915 (8,800) (8,800) (7,800) (7,800) Investing Cash Flow Investments in Property & Equipment Investments in Businesses Cash from Investing (8,800) (8,800) (7.800) (7,800) (9,201) Financing Cash Flow Issuance of Debt line of credit) Repayment of Debt Issuance of equity Repurchase of equity Payment of Dividends Cash from Financing 39,602 39,602 (9,201) 47,992 Net Increase (decrease) in Cash Opening Cash Balance Closing Cash Balance 12,540 47,992 60,532 2,590 60,532 63,122 15,115 63,122 78,237 47,992 Working Capital & Depreciation Working Capital Schedule Accounts Receivable Inventory Accounts Payable Net Working Capital (NWC) Acquisition Adjustments Change in NWC Depreciation Schedule PPE Opening Plus Capex Less Depreciation PPE Closing 29,911 8,800 (11,558) 27,153 27.153 8,800 (10,689) 25,264 25,264 7,800 (9,577) 23,487 23,487 7,800 (9,577) 21,710 Live Case -> Sponsor IRR-> Error Checks -> $ Value % of Total Financing Fee Coupon Mandatory Principal Repayment (Loan Amortization) Year 2 Year 3 Year 4 Year 5 Sweep Year 1 Year 6 Yea LBO Model for Company Inc. -8 -9 Financing 0 1 Type X EBITDA 2 Cash (target) 3 Line of Credit 0.30x -4 Term Loan 1 1.80x 5 Term Loan 2 2.20x 6 Sub Debt 1 0.50x 7 Sponsor Equity 8 Total -9 9 FO 1 Sources & Uses of Cash 2 Sources of Cash -3 -4 5 56 7 1.8% 1.8% 1.8% 1.8% 0.9% 2.5% 5.0% 7.5% 10.0% na na 50.0% 50.0% 0.0% na 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 60.0% 10.0% 0.0% 0.0% 0.0% 0.0% 50.0% 0.0% 0.0% 0.C 0.C 0.C 100. 0. Uses of Cash Cash Consideration Stock Consideration Target Debt - Replace Debt Financing Fees Equity Financing Fees Other Closing Costs Total Uses Book Value Fair Value Adjustment -9 Total Sources 0 1 2 Goodwill and Purchase Price Allocation 3 Fair Market Value -4 Cash 5 Accounts Receivable -6 Inventory 7 Property, Plant & Equipment -8 Identifiable Intangibles 9 Identifiable Assets 0 0 =1 4,500 5,800 29,000 Purchase Price Allocation Total Purchase Price Net Book Value of Assets Excess Purchase Price Write-off Existing Goodwill Fair Value Adjustments Excess Purchase Price After Adjustments Goodwill Live Case -> Sponsor IRR-> Error Checks -> $ Value % of Total Financing Fee Coupon Mandatory Principal Repayment (Loan Amortization) Year 2 Year 3 Year 4 Year 5 Sweep Year 1 Year 6 Yea LBO Model for Company Inc. -8 -9 Financing 0 1 Type X EBITDA 2 Cash (target) 3 Line of Credit 0.30x -4 Term Loan 1 1.80x 5 Term Loan 2 2.20x 6 Sub Debt 1 0.50x 7 Sponsor Equity 8 Total -9 9 FO 1 Sources & Uses of Cash 2 Sources of Cash -3 -4 5 56 7 1.8% 1.8% 1.8% 1.8% 0.9% 2.5% 5.0% 7.5% 10.0% na na 50.0% 50.0% 0.0% na 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 10.0% 10.0% 0.0% 0.0% 0.0% 60.0% 10.0% 0.0% 0.0% 0.0% 0.0% 50.0% 0.0% 0.0% 0.C 0.C 0.C 100. 0. Uses of Cash Cash Consideration Stock Consideration Target Debt - Replace Debt Financing Fees Equity Financing Fees Other Closing Costs Total Uses Book Value Fair Value Adjustment -9 Total Sources 0 1 2 Goodwill and Purchase Price Allocation 3 Fair Market Value -4 Cash 5 Accounts Receivable -6 Inventory 7 Property, Plant & Equipment -8 Identifiable Intangibles 9 Identifiable Assets 0 0 =1 4,500 5,800 29,000 Purchase Price Allocation Total Purchase Price Net Book Value of Assets Excess Purchase Price Write-off Existing Goodwill Fair Value Adjustments Excess Purchase Price After Adjustments Goodwill Live Case -> Sponsor IRR -> Error Checks -> Close 2018F 2019F 2020F 2021F 2022F 2023F 2024F LBO Model for Company Inc. 2 Credit Metrics 4 5 6 Short Term Debt =7 Long Term Debt 8 Total Debt 9 10 Cash 1 Net Debt 2 12 13 Interest Expense 4 Principle Repayments 15 Total Debt Service 16 17 EBIT 18 EBITDA 19 EBITDA - Capex 0 Fixed Charges 11 2 Total Debt EBITDA Net Debt/EBITDA 14 EBIT/Interest 5 Debt Service Coverage (EBITDA) / (Interest + Principle) 16 Debt Service Coverage (EBITDA - Capex)/(Interest + Principle) 7 Fixed Charge Coverage (EBITDA - Capex - Taxes ) / (Interest + Principle) 18 19 Income Statement 1 2014A 2015A 2 3 Revenue 76,814 78,915 Cost of Goods Sold (COGS) 30,726 32,510 5 Gross Profit 46,088 46,405 6 Marketing, Advertising & Promotion 11,138 11,577 8 & General & Administrative 7,588 7,960 9 EBITDA 27,362 26,868 C0 -1 Depreciation & Amortization 1 11,558 10,689 -2 EBIT 15,804 16,179 -3 -4 Interest 2,000 2,000 -5 Current Taxes 2,880 3,080 -6 Net Earnings 10,924 11,099 -7 2016A 2017A 2018F 2019F 2020F 2021F 2022F 2023F 2024F 80,138 33,849 46,289 84,412 35,416 48,996 12,229 8,007 26,053 13,688 8,536 26,772 9,577 16,476 9,577 17,195 1,250 3,370 11,856 1,250 3,455 12,490 Live Case -> Sponsor IRR-> Error Checks -> LBO Model for Company Inc. Balance Sheet 2014A 2015A 2016A 2017A 2018F' 2019F 2020F 2021F 2022F 2023F 2024F 47,992 3,546 4,507 56,045 27,153 60,532 3,589 5,050 69,171 25,264 63,122 3,989 6,513 73,624 23,487 78,237 4,010 6,268 88,515 21,710 83,198 94,435 97,111 110,225 2 Assets 3 Cash + Accounts Receivable 5 Inventory Current Assets Property & Equipment 3 Goodwill e Total Assets ) 1 Liabilities 2 Short Term Debt 3 Accounts Payable Current Liabilities 5 Long Term Debt Total Liabilities Shareholder's Equity B| Equity Capital Retained Earnings Shareholder's Equity Total Liabilities & Shareholder's Equity 2 3 Check 2,761 2,761 35,011 37,772 2,899 2,899 35,011 37,910 2,920 2,920 25,810 28.730 3,544 3,544 25,810 29,354 43,500 1.926 45,426 83,198 43,500 13,025 56,525 94,435 43,500 24,881 68,381 97,111 43,500 37,371 80.871 110,225 2014A 2015A 2016A 2017A 2018F 2019F 2020F 2021F 2022F 2023F 2024F 5 Cash Flow Statement 7 3 Operating Cash Flow Net Earnings Plus: Depreciation & Amortization Less: Changes in Working Capital 3 Cash from Operations 10,924 11,558 5,292 17,190 11,099 10,689 448 21,340 11,856 9,577 1,842 19,591 12,490 9,577 (848) 22,915 (8,800) (8,800) (7,800) (7,800) (8,800) (8,800) (7,800) (7,800) 19,201) Investing Cash Flow Investments in Property & Equipment Investments in Businesses Cash from Investing 3 Financing Cash Flow Issuance of Debt line of credit) Repayment of Debt 3 Issuance of equity # Repurchase of equity 5 Payment of Dividends Cash from Financing 7 Net Increase (decrease) in Cash Opening Cash Balance Closing Cash Balance 39,602 39,602 (9,201) 47,992 12,540 47,992 60,532 2,590 60,532 63,122 15,115 63,122 78,237 47,992 LBO Model for Company Inc. Live Case -> Sponsor IRR-> Error Checks -> Cash Flow Statement 2014A 2015A 2016A 2017A 2018F 2019F 2020F 2021F 2022F 2023F 2024F Operating Cash Flow Net Earnings Plus: Depreciation & Amortization Less: Changes in Working Capital Cash from Operations 10,924 11,558 5,292 17,190 11,099 10,689 448 21,340 11,856 9,577 1,842 19,591 12,490 9,577 (848) 22,915 (8,800) (8,800) (7,800) (7,800) Investing Cash Flow Investments in Property & Equipment Investments in Businesses Cash from Investing (8,800) (8,800) (7.800) (7,800) (9,201) Financing Cash Flow Issuance of Debt line of credit) Repayment of Debt Issuance of equity Repurchase of equity Payment of Dividends Cash from Financing 39,602 39,602 (9,201) 47,992 Net Increase (decrease) in Cash Opening Cash Balance Closing Cash Balance 12,540 47,992 60,532 2,590 60,532 63,122 15,115 63,122 78,237 47,992 Working Capital & Depreciation Working Capital Schedule Accounts Receivable Inventory Accounts Payable Net Working Capital (NWC) Acquisition Adjustments Change in NWC Depreciation Schedule PPE Opening Plus Capex Less Depreciation PPE Closing 29,911 8,800 (11,558) 27,153 27.153 8,800 (10,689) 25,264 25,264 7,800 (9,577) 23,487 23,487 7,800 (9,577) 21,710