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Illustrative LBO Analysis
Illustrative LBO Analysis
x Transaction Assumptions
($ in millions, except where otherwise specified)
CIRC On
x PF Income Statement
($ in millions, except where otherwise specified)
Fiscal Year Ending December 31, 2015A 2016A 2017E 2018E 2019E
Revenue $327 $342 $359 $381 $407
% Growth 4.6% 5.0% 6.0% 7.0%
Memo:
Revenue Growth (%) 4.6% 5.0% 6.0% 7.0%
COGS (% of Sales) 40.0% 40.0% 40.0% 40.0% 40.0%
EBITDA Margin (%) 26.0% 26.3% 26.3% 26.3% 26.3%
D&A (% of Sales) 4.6% 5.0% 5.0% 5.0% 5.0%
CapEx (% of Sales) 5.2% 5.0% 5.0% 5.0% 5.0%
x PF Working Capital
($ in millions, except where otherwise specified)
Fiscal Year Ending December 31, 2015A 2016A 2017E 2018E 2019E
Memo:
Sales $327 $342 $359 $381 $407
COGS 131 137 144 152 163
Days
Key Assumptions 360
Days Sales Outstanding (DSO) 94.7 94.7 94.7 94.7
Days Inventory Held (DIH) 118.4 118.4 118.4 118.4
Days Payable Outstanding (DPO) 115.8 115.8 115.8 115.8
Cash Conversion Cycle 97.4 97.4 97.4 97.4
Calculated NWC
Net Accounts Receivable $90 $95 $100 $107
Inventory 45 47 50 54
Other Current Assets 7 7 8 8
Current Assets $142 $149 $158 $169
x PF Balance Sheet
($ in millions, except where otherwise specified)
Fiscal Year Ending December 31, 2016A PF 2016 2017E 2018E 2019E
Assets
Cash $5 $5 $5 $5 $5
Net Accounts Receivable 90 90 95 100 107
Inventory 45 45 47 50 54
Other Current Assets 7 7 7 8 8
Total Current Assets $147 $147 $154 $163 $174
Net PP&E 78 78 78 78 78
Goodwill 20 670 670 670 670
Other Noncurrent Assets 6 17 15 14 12
Total Assets $251 $912 $918 $925 $935
Fiscal Year Ending December 31, 2015A 2016A 2017E 2018E 2019E
Cash from Operating Activities
Net Income $27 $29 $33
( + ) D&A 18 19 20
( + ) Noncash Interest Expense 10 11 12
( + / - ) Change in NWC (3) (4) (5)
Cash from Operating Activities $52 $56 $61
( - ) CapEx (17) (17) (18) (19) (20)
Levered Free Cash Flow $34 $37 $40
Memo:
Average Cash Balance $5 $5 $5
Cash Interest Income 0.250% 0 0 0
x PF Debt Schedule
($ in millions, except where otherwise specified)
Memo:
Undrawn Revolver Commitment $100 $100 $100 $100 $100
Mandatory Amortization
Revolver -- -- --
Term Loan B (3) (3) (3)
Senior Notes -- -- --
Subordinated Notes -- -- --
Total ($3) ($3) ($3)
Optional Prepayment
Revolver -- -- --
Term Loan B (31) (34) (38)
Senior Notes -- -- --
Subordinated Notes -- -- --
Total ($31) ($34) ($38)
x PF Interest Expense
($ in millions, except where otherwise specified)
Debt Balance
Undrawn Revolver $100 $100 $100
Revolver -- -- --
Term Loan B 258 222 184
Senior Notes 225 225 225
Subordinated Notes 104 114 124
Interest Expense
Undrawn Revolver $0 $0 $0
Revolver -- -- --
Term Loan B 9 9 8
Senior Notes 16 16 16
Subordinated Notes 9 10 11
Total $34 $35 $35
Outstanding Debt
Senior Secured Debt $275 $241 $204 $164
Senior Debt 500 466 429 389
Total Debt 600 575 548 518
Line Items
Adj. EBITDA $90 $95 $100 $107
Cash Interest Expense 25 25 25 24
CapEx 17 18 19 20
Leverage
Senior Secured Debt / Adj. EBITDA 3.1x 2.5x 2.0x 1.5x
Senior Debt / Adj. EBITDA 5.6 4.9 4.3 3.6
Total Debt / Adj. EBITDA 6.7 6.1 5.5 4.8
Interest Coverage
Adj. EBITDA / Cash Interest Expense 3.6x 3.8x 4.0x 4.4x
Adj. EBITDA - CapEx / Cash Interest Expense 2.9 3.1 3.2 3.6
x Illustrative Returns
($ in millions, except where otherwise specified)
Enterprise Value
(Based on Multiple of LTM Adj. EBITDA)
MoIC Investment
(Based on Multiple of LTM Adj. EBITDA) $236
IRR
(Based on Multiple of LTM Adj. EBITDA) Years: 1 yr 2 yr 3 yr
$ Leverage Fees - $
Revolver -- $1
$810 Term Loan B 275 3.1x 3
(231) Senior Secured Debt $275 3.1x
91 Senior Notes 225 2.5x 5
$670 Senior Debt $500 5.6x
Subordinated Notes 100 1.1x 3
Total $600 6.7x $11
1
1
$5 $5 $5 $5 $5
114 119 124 129 134
57 60 62 65 67
9 9 10 10 10
$184 $193 $201 $209 $217
78 78 78 78 78
670 670 670 670 670
11 10 8 7 7
$943 $951 $957 $964 $971
$5 $5 $5 $5 $5
34 38 42 47 51
(5) (5) (5) (5) (5)
$34 $38 $42 $47 $51
($3) ($3) ($3) ($3) ($3)
(31) (35) (40) (44) (48)
$5 $5 $5 $5 $5
$5 $5 $5 $5 $5
$5 $5 $5 $5 $5
0 0 0 0 0
-- -- -- -- --
130 92 49 3 --
225 225 225 225 177
129 129 129 129 129
$484 $446 $403 $357 $306
80.7% 74.3% 67.2% 59.5% 50.9%
-- -- -- -- --
1.0% 1.0% 1.0% 1.0% 1.0%
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
(3) (3) (3) (3) (3)
-- -- -- -- --
-- -- -- -- --
($3) ($3) ($3) ($3) ($3)
-- -- -- -- --
(31) (35) (40) (44) (0)
-- -- -- -- (48)
-- -- -- -- --
($31) ($35) ($40) ($44) ($48)
2020E 2021E 2022E 2023E 2024E
$0 $0 $0 $0 $0
-- -- -- -- --
8 6 4 2 0
16 16 16 16 14
11 11 11 11 11
$35 $33 $31 $29 $25
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
$0 $0 -- -- --
1 1 1 0 --
1 1 1 1 1
0 0 0 0 0
$1 $1 $1 $1 $1
-- -- -- -- --
1 1 1 1 1
$1 $1 $1 $1 $1
2020E 2021E 2022E 2023E 2024E
4 yr 5 yr 6 yr 7 yr 8 yr
$119
$1,193
(441)
$752