Consider Gentech, a company that is evaluating how large of an acquisition it could make without raising additional equity capital. By modifying the assumed purchase price and the acquisition multiple, answer the questions below: 1. Using the assumptions below, determine based on revenue, the largest company that Gentech can acquire without raising additional equity. Modify the dollar value of the acquisition to determine the resulting revenue size of the prospective acquisition. 2. If the acquisition multiple rises to 8.0Xs EBITDA, determine, based on revenue, the largest company that Gentech can acquire without raising additional equity. Table 3.1. Genetech Assumptions Financial information Data 10.00% 7.00x Senior debt limit as multiple of EBITDA 3.00x Total debt max leverage 4.00x EBITDA margin Transaction multiple Ac Go Maximum Acquisition Leverage Gentech is evaluating how large an acquisition it could purchase without raising additional equity capital. By modifying the assumed price, and the acquisition multiple, answer the questions below in the boxes provided. Question 1: Using the assumptions below, determine the largest company, based on revenue, that Gentech can acquire without raising additional equity. Modify cell G4 in the Debt Capacity Mode worksheet, increasing size of acquisition, to determine the highest revenue size target that Gentech can acquire with debt alone. Question 2: If the acquisition multiple rises to 8.0Xs EBITDA, determine the largest company based on revenue that Gentech can acquire without raising additional equity. Modify cell C21 below, and cell G4 in the Debt Capacity Model worksheet, increasing size of acquisition, to determine the highest revenue size target that Gentech can acquire with debt alone. Assumptions EBITDA Margin Transaction Multiple Senior Debt Limit as multiple of EBITDA Total Debt Max Leverage Answers Question 1: Highest revenue target assuming 7.0Xs EBITDA purchase Question 2: Highest revenue target assuming 8.0Xs EBITDA purchase 10% 7.00x Modify acquistion multiple as needed 3.00x 4.00x Revenue Acquired Revenue Pro Forma Revenue EBITDA Acquired EBITDA Pro Forma EBITDA Total Current Debt Acquisition Senior Debt Acquisition Second Lien/Sub Debt Pro Forma Total Debt Shareholders' Equity Additional Equity Capital Required Pro Forma Shareholders' Equity Senior Debt/EBITDA Total Debt/EBITDA Debt/Capital Purchase Price Target Company revenue Gentech LTM 12/31/2021 $150.0 $15.0 $15.0 $50.0 1.00x 1.00x 23.1% Acquisition Amount $25.0 Pro Forma 12/31/2021 $150.0 35.7 $185.7 $15.0 3.6 $18.6 $15.0 25.0 0.0 $40.0 $50.0 0.0 $50.0 2.15x 2.15x **Input Acquiring company information in Column E, update date in cell E6 **input acquisition size in row 4 INPUTS 10.00% COMMENTS 4.00x 5.00x Should be equal to acquiring company's EBITDA margin. 7.00x EBITDA Multiple Based on comparable transactions. Senior Debt Max Leverage Total Debt Max Leverage Consider Gentech, a company that is evaluating how large of an acquisition it could make without raising additional equity capital. By modifying the assumed purchase price and the acquisition multiple, answer the questions below: 1. Using the assumptions below, determine based on revenue, the largest company that Gentech can acquire without raising additional equity. Modify the dollar value of the acquisition to determine the resulting revenue size of the prospective acquisition. 2. If the acquisition multiple rises to 8.0Xs EBITDA, determine, based on revenue, the largest company that Gentech can acquire without raising additional equity. Table 3.1. Genetech Assumptions Financial information Data 10.00% 7.00x Senior debt limit as multiple of EBITDA 3.00x Total debt max leverage 4.00x EBITDA margin Transaction multiple Ac Go Maximum Acquisition Leverage Gentech is evaluating how large an acquisition it could purchase without raising additional equity capital. By modifying the assumed price, and the acquisition multiple, answer the questions below in the boxes provided. Question 1: Using the assumptions below, determine the largest company, based on revenue, that Gentech can acquire without raising additional equity. Modify cell G4 in the Debt Capacity Mode worksheet, increasing size of acquisition, to determine the highest revenue size target that Gentech can acquire with debt alone. Question 2: If the acquisition multiple rises to 8.0Xs EBITDA, determine the largest company based on revenue that Gentech can acquire without raising additional equity. Modify cell C21 below, and cell G4 in the Debt Capacity Model worksheet, increasing size of acquisition, to determine the highest revenue size target that Gentech can acquire with debt alone. Assumptions EBITDA Margin Transaction Multiple Senior Debt Limit as multiple of EBITDA Total Debt Max Leverage Answers Question 1: Highest revenue target assuming 7.0Xs EBITDA purchase Question 2: Highest revenue target assuming 8.0Xs EBITDA purchase 10% 7.00x Modify acquistion multiple as needed 3.00x 4.00x Revenue Acquired Revenue Pro Forma Revenue EBITDA Acquired EBITDA Pro Forma EBITDA Total Current Debt Acquisition Senior Debt Acquisition Second Lien/Sub Debt Pro Forma Total Debt Shareholders' Equity Additional Equity Capital Required Pro Forma Shareholders' Equity Senior Debt/EBITDA Total Debt/EBITDA Debt/Capital Purchase Price Target Company revenue Gentech LTM 12/31/2021 $150.0 $15.0 $15.0 $50.0 1.00x 1.00x 23.1% Acquisition Amount $25.0 Pro Forma 12/31/2021 $150.0 35.7 $185.7 $15.0 3.6 $18.6 $15.0 25.0 0.0 $40.0 $50.0 0.0 $50.0 2.15x 2.15x **Input Acquiring company information in Column E, update date in cell E6 **input acquisition size in row 4 INPUTS 10.00% COMMENTS 4.00x 5.00x Should be equal to acquiring company's EBITDA margin. 7.00x EBITDA Multiple Based on comparable transactions. Senior Debt Max Leverage Total Debt Max Leverage