Gamma LLC is considering a leveraged buyout of Delta Co. Delta can be acquired for 5 times EBITDA (LTM). Gamma expects to be able to sell Delta at 5.5 times EBITDA (LTM) after four years at the end of 2027. The buyout will be financed with 70% debt. The interest on the debt is 9% and the principal will be repaid using all cash that is available for debt repayment each year. Any remaining debt will be repaid when Delta is sold off by Gamma after four years.

The financial year (2023) has just concluded for Gamma and Delta. In 2023, Delta's sales were $90 million. Delta's sales are expected to grow by 10% in 2024, and 3% thereafter. Delta's EBIT margin was 35% in 2023, and that is expected to continue for at least four years. Delta's depreciation in 2023 was $4.5 million. Delta's existing net plant, property, and equipment as of the end of 2023 is $50 million, and this will be depreciated to zero in 10 years, using the straight-line method. Delta will incur capital expenditures of around 5% of sales each year. These capital expenditures will also be depreciated to zero in 10 years using the straight-line method. Delta needs to maintain a working capital of 20% of sales. Delta's interest expenses are calculated on the ending balance of the previous year’s debt. Delta's tax rate is 40% and will have no cash right after the buyout. All cash flows occur at the end of the year, including capital expenditures. (Note that this means the depreciation expenses corresponding to capital expenditures in a particular year will start from the following year.) 

What is the expected IRR from this leveraged buyout?