LBO entry and Sources & Uses

Methods and settings

Choose the acquisition basis

Entry occurs at the selected year end. Choose the valuation method and operating metric, then inspect entry EV and equity purchase price. The bridge year separately supplies cash and existing debt unless overridden. Direct equity price is converted back to EV using the same bridge; the equity purchase price must not be negative. Entry/exit dates and metrics are independent choices.

Balance the funding identity

Uses = equity purchase price + existing debt refinanced + transaction fees + financing fees + other uses + minimum-cash top-up. Sources = new debt + sponsor equity + rollover + other sources. Sponsor equity is the residual and must be positive. Transaction fees can be a percentage of EV or a direct amount; financing fees can be a percentage of new debt or a direct amount. Direct amounts override percentages.

Refinance or retain existing debt

Blank Existing debt to refinance means all bridge gross debt. A smaller amount leaves retained debt; an amount above existing debt is rejected. Retained debt stays in ending debt and incurs the model interest rate. It has no independent tranche amortization schedule here. This entry use of funds is separate from a Credit Refinancing case and does not update that operator.

Check sponsor funding with a simple example

Suppose EV 1,000, cash 100 and debt 300 give equity purchase price 800. Refinancing all 300 and paying 20 transaction plus 10 financing fees creates uses 1,130. New debt 600 and rollover 100 leave sponsor equity 430. If minimum cash is 150, add 50 cash top-up: uses become 1,180 and sponsor equity 480. All figures use one consistent monetary unit. Other sources would reduce sponsor funding but receive no equity participation.