Carlyle Mock Case Study – Medical devices take-private

At a glance

Complete a medical-device take-private with purchase price allocation, share dilution and a temporary increase in R&D spending. You have two hours and a template. Build the forecast and financing schedules, calculate returns and assess the cash needed during the investment period.

The brief

Lissett Medical plc (Lissett, or the Company) is a London-listed medical consumables business with its head office in Leeds. The fund is preparing a leveraged buyout of the Company.

Lissett's shares last closed at £12.40. There are 58 million shares in issue, and executives hold 6.5 million options with an exercise price of £8.20. At 31 December 2025 the Company had £20m of cash, £135m of borrowings and £198m of shareholders' equity.

The transaction. Lissett's board is prepared to recommend an offer at a 35% premium to that closing price. The fund would buy the shares rather than the assets, so the tax base of the assets carries over unchanged. The existing borrowings would be refinanced at completion, which triggers an early-repayment charge of £4m. Advisory and other deal costs come to £16m, and arranging the new debt costs £21m in fees on top. Completion is assumed on 31 December 2025.

Financing. Lenders have underwritten the buyer's debt: £850m of funded debt, 6.25x Lissett's 2025 EBITDA of £136m, in two tranches:

• a £500m senior term loan at 7.0%, repayable over 7 years, with 1% of the original amount repaid each year;
• £350m of subordinated notes at 10.0%, repaid in one payment after 8 years.

A £65m revolving credit facility sits alongside, undrawn at completion. The fund will provide the rest of the money as equity, and will charge Lissett a management fee of £7m a year.

Your role. You are an associate on the fund's deal team. The partner wants a working LBO model and the five outputs listed under Your tasks within two hours, checked before you hand it in.