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Technology Private Equity Fund
An independent practice case, not supplied or endorsed by the named firm.
Model a payroll-software buyout, choose the senior debt level and explain the sources of the equity return.
Model a payroll-software buyout, choose the senior debt level and explain the sources of the equity return. You have three hours and a blank spreadsheet. Build a five-year integrated LBO, calculate returns for three exit years and reconcile the value creation bridge.
You are an associate on the deal team. The fund has agreed terms to buy Tamerton, with completion on 31 December 2025. The price is set as a multiple of next year's EBITDA, and the lenders have offered a mezzanine tranche of 1.0x EBITDA; how much senior debt to raise on top is your call.
The partner wants a model before the investment committee meets. It should show the business under the fund's ownership for five years, the entry valuation on several measures, how comfortably the business carries the debt, the fund's IRR and multiple of money for exits after three, four and five years, and where the equity value created comes from. The brief is the one-page Brief sheet in the candidate pack; the Model sheet is blank.
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