Using the following information calculate the IRR for the LBO transaction. Assume no dividends are paid to the equity holders. Assume pre deal debt is refinanced.

a) -2.5%

b) 13.4%

c) 2.5%

d) 5.7%

*Please provide explanation.

8.7 x Entry multiple Exit multiple 7.6 x LTM EBITDA 129.4 EBITDA growth rate 3.4% Pre deal net debt 323.3 Exit year 4 Acquisition debt multiple of LTM EBITDA 4.2 x % of acquisition debt repaid by exit year 26.8%