CTG www.ctguk.

com

173432978.xls.ms_office

LBO

LBO model
Base data
Ticker
SIC code
FactSet identifier
Current market price
Current year end
Transaction date
Stub period proportion
NOSH (m)
Marginal tax rate
Tax losses brought forward
Financing
Maximum total debt / EBITDA
Minimum equity proportion
3 year swap rate
Cash interest rate on revolver
Cash interest rate on cash
Valuation
Equity offer premium
Implied entry EV / EBITDA
Exit at end of year
Exit EV / EBITDA multiple
Exit fees as % of exit EV
Management warrants

Checks
Debt OK per Maximum total debt / EBITDA
Debt OK per Minimum equity proportion
Senior A amount ok
Senior B amount ok
Senior C amount ok
Mezzanine / HY debt amount ok
No revolver drawn
Value creation reconciles

11.21
30 Sep 09
15 Jul 09
20.8% Stub
733.30
35.00% TaxRate
ALL YELLOW CELLS SHOULD BE CHANGED. Green cells may (but need
-- TaxLosses
not) be changed.
This is an example of a standard LBO model. The model has been setup
6.0x
according to CTG's best practice modelling guidelines. The model produces an
40.00%
equity returns analysis on a private equity investment. The main outputs are exit
2.58%
IRRs, cash on cash multiples and value creation for both the firm and
management.
6.08% RevInt
0.50% CashInt
All interest is calculated on the balance outstanding at the start of the peiod.
20.00%
7.8x
4
7.8x ExitMulti
3.00% ExitFees
1.50%

A relativley simple capital structure has been included, but with the ability to add
significant flexibility such as variable paydown, non-cash interest, cash sweep,
tax deductibility of shareholder loan interest, management warrants, etc.
Checks at the top of this sheet indicate when an inappropriate structure is being
used .

--------Typically, CTG add further functionality in the form of:

* Flexible operating scenaria such as base, management and banking cases
* Equity roll overs
* Asset backed loans
* Capex facilities
* Capital structure scenario management
* Interest rate conventions (opening, closing and average)
* Debt decircularisation
* Dividend payments
* Graph driven assumptions
* Restructuring costs
* Time flexible sensitivity analysis
* Our models can be integrated into FACTSET's =FDS coding and CapIQ

Sources and uses of funds statement

Proportion
Sources of funds
Senior A
Senior B
Senior C
Mezzanine / HY debt
Total debt
Equity - management
Shareholder loan
Equity - PE funds
Uses of funds
Current share price
Offer premium
Offer price
NOSH (m)
Equity transaction cost
ITM share options buy out
Total equity transaction cost
Existing debt
Other adjustments
Advisory fees
Debt fees
Working capital cash requirements

85.00%

2,541
1,307
1,307
1,743
6,898
25
3,922
692
11,536

22.0%
11.3%
11.3%
15.1%
59.8%
0.2%
34.0%
6.0%
100.0%

11.21
20.00%
13.45
733

0.60%
0.60%

EBITDA x
1.75x
0.90x
0.90x
1.20x
4.75x

Term Repayment
method
7 years Amortising
8 years Bullet
9 years Bullet
11 years Bullet

Cash interest
Spreads
rate
3.50%
6.08%
3.90%
6.48%
4.30%
6.88%
4.00%
6.58%

Sweep?

% tax
deductable

EV / Sales
EV / EBITDA
EV / EBIT
P / taxed EBIT

30 Sep 09
Current
0.98x
7.8x
12.4x
13.8x

30 Sep 10
Forecast
0.90x
7.0x
10.8x
9.5x

30 Sep 11
2
13,598
(11,194)
(616)

30 Sep 12
3
14,510
(11,897)
(666)

Max cash
available
5,188
4,108
4,468
5,326

Yes
No
No
No

17.00%

Acquisition multiples

9,864
-9,864
1,433
-68
41
130
11,536

PIK
rate
---10.00%

Amount ok
Amount ok
Amount ok
Amount ok

60.00%

Summary financing
Entry EBITDA
Total senior debt / EBITDA
Total debt / EBITDA
Debt / equity
Debt / capital
Management equity proportion
PE equity proportion
Envy ratio

1,452
3.6x
4.8x
1.5x
59.8%
3.49%
96.5%
6.7x

Cash flow forecasts

Sales
COGS
SG&A

9/18/2013, 8:23 PM

30 Sep 06
(3)
7,787
(6,120)
(479)

30 Sep 07
(2)
9,412
(7,509)
(489)

30 Sep 08
(1)
10,383
(8,721)
(456)

30 Sep 09
-11,525
(9,566)
(507)

30 Sep 10
1
12,600
(10,416)
(562)

30 Sep 13
4
15,337
(12,523)
(714)

30 Sep 14
5
16,077
(13,074)
(759)

30 Sep 15
6
16,736
(13,554)
(802)

30 Sep 16
7
17,318
(13,968)
(842)

30 Sep 17
8
17,828
(14,321)
(879)

30 Sep 18
9
18,274
(14,619)
(914)

30 Sep 19
10
18,731
(14,984)
(937)

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 CTG www.ctguk.com

173432978.xls.ms_office

EBITDA
1,187
DA
(387)
EBIT
800
Cash taxes on EBIT
(274)
EBIT (1-Tc)
526
DA
387
Decrease (increase) in NWC
222
Net capex
(771)
Unlevered FCF
364
Stub period unlevered free cash flow
FCF available for debt service
Net interest paid
Free cash flow available for debt repayment
Mandatory repayments
Cash flow available for sweep
Revolver repayment
Senior A
11
Senior B
24
Senior C
37
Mezzanine / HY debt
50
(Increase in revolver) / Increase in cash
Cash flow forecast assumptions
Sales growth rates
COGS as % of sales
SG&A as % of sales
Tax rates on EBIT
Decr (incr) in NWC as incr in sales
Capex as % of sales
Capex / Depn multiples
Ratios
EBITDA margin
EBIT margin
EBIT (1-Tc) margin
EBITDA growth
EBIT growth
EBIT (1-Tc) growth
Unlevered free cash flow growth

9/18/2013, 8:23 PM

78.60%
6.16%
34.25%
9.90%
2.0x
15.25%
10.27%
6.75%

1,413
(467)
946
(342)
604
467
159
(1,080)
150

LBO

1,207
(549)
657
(259)
398
549
76
(985)
39

1,452
(544)
908
(195)
712
544
80
(980)
357
74
74
(92)
(17)
-(17)
-----(17)

1,622
(581)
1,041
-1,041
581
74
(985)
711
-711
(455)
257
(363)
(106)
-----(106)

1,788
(612)
1,176
(5)
1,170
612
67
(978)
872
-872
(446)
427
(363)
64
-(64)
-----

1,947
(638)
1,310
(27)
1,283
638
61
(959)
1,022
-1,022
(434)
588
(363)
225
-(225)
-----

2,100
(658)
1,441
(38)
1,403
658
54
(933)
1,183
-1,183
(413)
769
(363)
406
-(406)
-----

2,244
(674)
1,570
(46)
1,524
674
48
(899)
1,347
-1,347
(383)
964
(363)
601
-(31)
---570

2,380
(685)
1,695
(36)
1,659
685
42
(861)
1,525
-1,525
(375)
1,150
-1,150
-----1,150

2,508
(692)
1,816
(9)
1,807
692
36
(819)
1,717
-1,717
(389)
1,327
-1,327
-----1,327

2,628
(696)
1,933
-1,933
696
31
(775)
1,884
-1,884
(387)
1,497
(1,307)
190
-----190

2,741
(696)
2,045
-2,045
696
27
(731)
2,037
-2,037
(325)
1,712
(1,307)
405
-----405

2,810
(714)
2,096
-2,096
714
27
(749)
2,088
-2,088
(279)
1,809
-1,809
-----1,809

20.86%
79.79%
5.20%
36.16%
9.81%
11.48%
2.3x

10.32%
83.99%
4.39%
39.41%
7.77%
9.48%
1.8x

11.00%
83.00%
4.40%
33.00%
7.00%
8.50%
1.80x

9.33%
82.66%
4.46%
33.22%
6.88%
7.82%
1.70x

7.91%
82.32%
4.53%
33.43%
6.76%
7.19%
1.60x

6.71%
81.99%
4.59%
33.65%
6.65%
6.61%
1.50x

5.69%
81.65%
4.66%
33.87%
6.54%
6.08%
1.42x

4.83%
81.32%
4.72%
34.10%
6.43%
5.59%
1.33x

4.10%
80.99%
4.79%
34.32%
6.32%
5.14%
1.26x

3.47%
80.66%
4.86%
34.55%
6.21%
4.73%
1.18x

2.95%
80.33%
4.93%
34.77%
6.10%
4.35%
1.11x

2.50%
80.00%
5.00%
35.00%
6.00%
4.00%
1.05x

2.50%
80.00%
5.00%
35.00%
6.00%
4.00%
1.05x

15.01%
10.05%
6.42%
19.03%
18.24%
14.81%
(58.76%)

11.62%
6.33%
3.84%
(14.62%)
(30.52%)
(34.06%)
(74.35%)

12.88%
8.27%
8.27%
11.72%
14.70%
46.18%
99.28%

13.15%
8.65%
8.61%
10.21%
12.91%
12.38%
22.64%

13.42%
9.02%
8.84%
8.91%
11.37%
9.59%
17.11%

13.69%
9.40%
9.15%
7.81%
10.06%
9.38%
15.74%

13.96%
9.77%
9.48%
6.87%
8.93%
8.67%
13.88%

14.22%
10.13%
9.91%
6.07%
7.97%
8.82%
13.20%

14.48%
10.49%
10.44%
5.38%
7.14%
8.96%
12.58%

14.74%
10.84%
10.84%
4.79%
6.42%
6.93%
9.76%

15.00%
11.19%
11.19%
4.29%
5.80%
5.80%
8.11%

15.00%
11.19%
11.19%
2.50%
2.50%
2.50%
2.50%

12.60%
7.88%
6.18%
20.36%
38.15%
78.92%
827.26%

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173432978.xls.ms_office

LBO

Returns analysis

Total firm returns

EBITDA
Exit EV / EBITDA
Implied exit EV
Less: net debt (funds)
Less: exit fees
Implied total equity value
Equity invested at entry
Total equity value created
Cash on cash multiples
Exit IRR
Management returns
Implied total equity value
Less: shareholder loan
Implied pure equity value
Management share of pure equity
Management equity invested
Value created for management
Management cash on cash multiples
Management exit IRR
PE returns
Implied total equity value
Less: management share of pure equity value
Implied pure equity value
PE equity and shareholder loan invested
Value created for management
Management cash on cash multiples
Management exit IRR
Value creation

4.99%

30 Sep 09
0.21

30 Sep 10
1.21

30 Sep 11
2.21

30 Sep 12
3.21

30 Sep 13
4.21

30 Sep 14
5.21

30 Sep 15
6.21

30 Sep 16
7.21

30 Sep 17
8.21

30 Sep 18
9.21

30 Sep 19
10.21

1,452
7.8x
11,297
(6,959)
(339)
3,999
4,639
(640)
0.9x
(51.0%)

1,622
7.8x
12,622
(6,894)
(379)
5,349
4,639
710
1.2x
12.5%

1,788
7.8x
13,910
(6,679)
(417)
6,814
4,639
2,176
1.5x
19.0%

1,947
7.8x
15,150
(6,322)
(455)
8,373
4,639
3,735
1.8x
20.2%

2,100
7.8x
16,334
(5,808)
(490)
10,036
4,639
5,397
2.2x
20.1%

2,244
7.8x
17,456
(5,125)
(524)
11,807
4,639
7,169
2.5x
19.6%

2,380
7.8x
18,515
(4,284)
(555)
13,676
4,639
9,038
2.9x
19.0%

2,508
7.8x
19,512
(3,296)
(585)
15,630
4,639
10,992
3.4x
18.4%

2,628
7.8x
20,447
(2,173)
(613)
17,660
4,639
13,022
3.8x
17.7%

2,741
7.8x
21,324
(873)
(640)
19,812
4,639
15,173
4.3x
17.1%

2,810
7.8x
21,857
484
(656)
21,686
4,639
17,047
4.7x
16.3%

3,999
(4,060)
(62)
(3)
25
(28)
nm
nm

5,349
(4,751)
598
30
25
5
1.2x
15.7%

6,814
(5,558)
1,256
63
25
38
2.5x
51.6%

8,373
(6,503)
1,870
93
25
68
3.7x
50.7%

10,036
(7,609)
2,427
121
25
96
4.8x
45.5%

11,807
(8,902)
2,905
145
25
120
5.8x
40.1%

13,676
(10,416)
3,260
163
25
138
6.5x
35.2%

15,630
(12,186)
3,444
172
25
147
6.9x
30.6%

17,660
(14,258)
3,402
170
25
145
6.8x
26.3%

19,812
(16,682)
3,130
156
25
131
6.2x
22.0%

21,686
(19,518)
2,168
108
25
83
4.3x
15.4%

3,999
3
4,002
4,614
(612)
0.9x
(49.5%)

5,349
(30)
5,319
4,614
705
1.2x
12.5%

6,814
(63)
6,752
4,614
2,138
1.5x
18.8%

8,373
(93)
8,280
4,614
3,666
1.8x
20.0%

10,036
(121)
9,915
4,614
5,301
2.1x
19.9%

11,807
(145)
11,663
4,614
7,049
2.5x
19.5%

13,676
(163)
13,514
4,614
8,900
2.9x
18.9%

15,630
(172)
15,458
4,614
10,845
3.4x
18.3%

17,660
(170)
17,491
4,614
12,877
3.8x
17.6%

19,812
(156)
19,656
4,614
15,042
4.3x
17.0%

21,686
(108)
21,578
4,614
16,964
4.7x
16.3%

Total equity value created

Value creation - management

350

12,000
960

1,607
10,000

3,736
(599)

33

56

300

130
(11)

250
(307)

8,000
6,000

10,036

(21)

200

100

4,000

50

121

92

150
4,639

25

(184)

--

2,000
-Equity
invested

9/18/2013, 8:23 PM

Sales growth COGS savings SG&A savings

Fees

Deleverage

Exit equity
value

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 CTG www.ctguk.com

173432978.xls.ms_office

Financing

Financing model
30 Sep 09 30 Sep 10 30 Sep 11 30 Sep 12 30 Sep 13 30 Sep 14 30 Sep 15 30 Sep 16 30 Sep 17 30 Sep 18 30 Sep 19
-1
2
3
4
5
6
7
8
9
10
Debt summary
Senior A
Senior B
Senior C
Mezzanine / HY debt
Debt outstanding
Revolver / (Cash)
Net debt (funds)

11
24
37
50

Net debt at entry

Deleverage

6,768

Mandatory debt repayment summary

Senior A
11
Senior B
24
Senior C
37
Mezzanine / HY debt
50
Total mandatory repayment
Cash interest paid summary
Senior A
Senior B
Senior C
Mezzanine / HY debt
Revolver / (Cash)
Total cash interest paid
PIK interest summary
Senior A
Senior B
Senior C
Mezzanine / HY debt
Total PIK interest

9/18/2013, 8:23 PM

2,541
1,307
1,307
1,917
7,072
(113)
6,959

2,178
1,307
1,307
2,109
6,901
(6)
6,894

1,752
1,307
1,307
2,319
6,685
(6)
6,679

1,163
1,307
1,307
2,551
6,329
(6)
6,322

394
1,307
1,307
2,806
5,814
(6)
5,808

-1,307
1,307
3,087
5,701
(576)
5,125

-1,307
1,307
3,396
6,010
(1,726)
4,284

-1,307
1,307
3,735
6,349
(3,053)
3,296

--1,307
4,109
5,416
(3,243)
2,173

---4,520
4,520
(3,647)
873

---4,972
4,972
(5,456)
(484)

6,768
(192)

6,768
(127)

6,768
89

6,768
445

6,768
960

6,768
1,643

6,768
2,484

6,768
3,472

6,768
4,595

6,768
5,895

6,768
7,252

------

------

-1,307
--1,307

--1,307
-1,307

------

------

363
---363

363
---363

363
---363

363
---363

363
---363

11
24
37
50

11

32
18
19
24
(1)
92

155
85
90
126
(1)
455

132
85
90
139
(0)
446

106
85
90
153
(0)
434

71
85
90
168
(0)
413

24
85
90
185
(0)
383

-85
90
203
(3)
375

-85
90
223
(9)
389

-67
90
246
(15)
387

--71
270
(16)
325

---297
(18)
279

11
24
37
50

---192
192

---211
211

---232
232

---255
255

---281
281

---309
309

---340
340

---374
374

---411
411

---452
452

---174
174

NetDebt

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 CTG www.ctguk.com

173432978.xls.ms_office

Financing

Financing model
30 Sep 09 30 Sep 10 30 Sep 11 30 Sep 12 30 Sep 13 30 Sep 14 30 Sep 15 30 Sep 16 30 Sep 17 30 Sep 18 30 Sep 19
-1
2
3
4
5
6
7
8
9
10
Debt schedules
Revolver / (Cash)
maximum drawdown
Cash interest rate on revolver 6.08%
Cash interest rate on cash
0.50%
Start
Revolver repayment
Residual cash flow
End
Cash interest paid (opening balance)
Cash interest rec'd (opening balance)
1 Senior A
Cash interest rate
6.08%
PIK interest rate
-Debt term
7 years Amortising
Start
Interest capitalised
Mandatory repayment
Balance available for sweep
Voluntary repayment
End
Amortisation schedule
100.00%
Cash interest paid (opening balance)
2 Senior B
Cash interest rate
6.48%
PIK interest rate
-Debt term
8 years Bullet
Start
Interest capitalised
Mandatory repayment
Balance available for sweep
Voluntary repayment
End
Amortisation schedule
100.00%
Cash interest paid (opening balance)

9/18/2013, 8:23 PM

--

(130)

2,541

1,307

(130)
-17
(113)
-(1)

(113)
-106
(6)
-(1)

(6)
--(6)
-(0)

(6)
--(6)
-(0)

(6)
--(6)
-(0)

(6)
-(570)
(576)
-(0)

2,541
--2,541
-2,541
-32

2,541
-(363)
2,178
-2,178
14.29%
155

2,178
-(363)
1,815
(64)
1,752
14.29%
132

1,752
-(363)
1,388
(225)
1,163
14.29%
106

1,163
-(363)
800
(406)
394
14.29%
71

394
-(363)
31
(31)
-14.29%
24

1,307
--1,307
-1,307
-18

1,307
--1,307
-1,307
-85

1,307
--1,307
-1,307
-85

1,307
--1,307
-1,307
-85

1,307
--1,307
-1,307
-85

1,307
--1,307
-1,307
-85

(576)
-(1,150)
(1,726)
-(3)

(1,726)
-(1,327)
(3,053)
-(9)

------14.29%
--

------14.29%
--

1,307
--1,307
-1,307
-85

1,307
--1,307
-1,307
-85

(3,053)
-(190)
(3,243)
-(15)

(3,243)
-(405)
(3,647)
-(16)

--------

--------

--

1,307
-(1,307)
---100.00%
67

(3,647)
-(1,809)
(5,456)
-(18)

--------

--

--

-------

-------

--

---

--

5 of 6

 CTG www.ctguk.com

173432978.xls.ms_office

Financing

Financing model
30 Sep 09 30 Sep 10 30 Sep 11 30 Sep 12 30 Sep 13 30 Sep 14 30 Sep 15 30 Sep 16 30 Sep 17 30 Sep 18 30 Sep 19
-1
2
3
4
5
6
7
8
9
10
3 Senior C
Cash interest rate
6.88%
PIK interest rate
-Debt term
9 years Bullet
Start
Interest capitalised
Mandatory repayment
Balance available for sweep
Voluntary repayment
End
Amortisation schedule
100.00%
Cash interest paid (opening balance)
4 Mezzanine / HY debt
Cash interest rate
6.58%
PIK interest rate
10.00%
Debt term
11 years Bullet
Start
Interest capitalised
Mandatory repayment
Balance available for sweep
Voluntary repayment
End
Amortisation schedule
-Cash interest paid (opening balance)
Equity
Shareholder loan
Start
Interest capitalised
End

1,743

17.00%

Working
Debt check
Start
Free cash flow available for debt repayment
PIK
End of year
check

9/18/2013, 8:23 PM

1,307

3,922

6,768

1,307
--1,307
-1,307
-19

1,307
--1,307
-1,307
-90

1,307
--1,307
-1,307
-90

1,307
--1,307
-1,307
-90

1,307
--1,307
-1,307
-90

1,307
--1,307
-1,307
-90

1,307
--1,307
-1,307
-90

1,307
--1,307
-1,307
-90

1,307
--1,307
-1,307
-90

1,307
-(1,307)
---100.00%
71

-------

1,743
174
-1,917
-1,917
-24

1,917
192
-2,109
-2,109
-126

2,109
211
-2,319
-2,319
-139

2,319
232
-2,551
-2,551
-153

2,551
255
-2,806
-2,806
-168

2,806
281
-3,087
-3,087
-185

3,087
309
-3,396
-3,396
-203

3,396
340
-3,735
-3,735
-223

3,735
374
-4,109
-4,109
-246

4,109
411
-4,520
-4,520
-270

4,520
452
-4,972
-4,972
-297

3,922
139
4,060

4,060
690
4,751

4,751
808
5,558

5,558
945
6,503

6,503
1,106
7,609

7,609
1,294
8,902

8,902
1,513
10,416

10,416
1,771
12,186

12,186
2,072
14,258

14,258
2,424
16,682

16,682
2,836
19,518

6,768
17
174
6,959
--

6,959
(257)
192
6,894
--

6,894
(427)
211
6,679
--

6,679
(588)
232
6,322
--

6,322
(769)
255
5,808
--

5,808
(964)
281
5,125
--

5,125
(1,150)
309
4,284
--

4,284
(1,327)
340
3,296
--

3,296
(1,497)
374
2,173
--

2,173
(1,712)
411
873
--

873
(1,809)
452
(484)
--

---

6 of 6