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Upper Mid-Market Private Equity Fund
An independent practice case, not supplied or endorsed by the named firm.
Complete an LBO for a vehicle-data business and calculate the highest price that meets a 20% IRR target.
Complete an LBO for a vehicle-data business and calculate the highest price that meets a 20% IRR target. You have two hours and a template containing the operating forecast and financing terms. Model floating-rate interest, the cash sweep and returns at different exit dates and multiples.
Wrenfield's corporate owner is selling the business on a cash-free, debt-free basis, and the fund has been invited into the second round. The deal team has pencilled in 10.0x 2025 EBITDA, financed with a Term Loan B and unsecured notes, and wants you to build the returns case from the template. The partner will ask two questions: what does the fund make at that price, and how far could it stretch before returns fall below target?
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