Thermia Ltd is a family-owned business that produces packaged foods for supermarkets. The family has recently lost interest in the business and has indicated a willingness to sell. The senior managers of the business have decided to make an offer to the family to buy the business and have approached a private equity firm to help raise the finance required. If the purchase offer is accepted, the purchase will take place on 1 December Year 12.

Operating profits for the year to 30 November Year 12 were 15.0m and these are expected to grow steadily over the next four years. The strategic plan for the business shows forecast future profits as follows:

Year to 30 November Year 13 Year 14 Year 15 Year 16 m Em m Em Forecast operating prot 16.0 17.4 18.5 19.0