Your question is Paper LBO with Exit Multiple. Take a moment with it on the right.
Talk me through your thinking if you like. When you're confident, submit your answer and I'll grade it like a real screen (7/10 or better passes).
Walk through a paper LBO with an exit multiple assumption.
Asked in the Superday: associate rounds (2 x 30 min) stage. LBO technical test during the Superday associate block.
Using the illustrative inputs below, build the transaction from entry valuation through sponsor returns. State the assumptions, show the sources and uses, calculate debt paydown, and test sensitivity to the exit multiple.
Assume USD, no transaction fees, no dividends, no refinancing, and that 50% of cumulative projected EBITDA is available for mandatory debt paydown.