Basic LBO Model

($ in millions)
Step 1. Model Assumptions

Entry Valuation Transaction Assumptions

LTM EBITDA Transaction Fees
Entry Multiple Financing Fees
Purchase Enterprise Value Financing Fees Amortization Period
Cash to B/S

Circularity Toggle

Debt Assumptions x EBITDA $ Amount Rate Floor % Amort. % Fee

Revolver
Term Loan B
Senior Notes
Total Debt

Step 2. Sources & Uses Table

Sources & Uses

Sources x EBITDA $ Amount Uses
Revolver Purchase Enterprise Value
Term Loan B Cash to B/S
Senior Notes Transaction Fees
Sponsor Equity Financing Fees
Total Sources Total Uses

Step 3. Free Cash Flow Projection

FCF Projection 2020A 2021E 2022E 2023E 2024E

($ in millions)

Revenue

EBITDA
Less: D&A
EBIT
Less: Interest
Less: Amortization of Financing Fees
EBT
Less: Taxes
Net Income
Plus: D&A
Plus: Amortization of Financing Fees
Less: Capex
Less: Δ in NWC
Less: Mandatory Amortization
Free Cash Flow (Pre-Revolver)
Revolver Drawdown / (Paydown)
Free Cash Flow (Post-Revolver)
Beginning Cash Balance
Net Change in Cash Flow
Ending Cash Balance

Operating Assumptions
Revenue Growth %
EBITDA Margin %
D&A % of Revenue
Capex % of Revenue
Δ in NWC % of Revenue
Tax Rate %

Step 4. Debt Schedule

Debt Schedule 2021E 2022E 2023E 2024E

($ in millions)

LIBOR (%) 1.5% 1.7% 1.9% 2.1%

Revolver
Beginning Balance
Revolver Drawdown / (Paydown)
Ending Balance

Total Revolver Capacity

Beginning Available Capacity

Ending Available Capacity

Revolver Interest Rate

Revolver Interest Expense

Unused Revolver Commitment Fee

Unused Commitment Fee

Term Loan B
Beginning Balance
Less: Mandatory Amortization
Ending Balance

TLB Interest Rate

TLB Interest Expense

Senior Notes
Beginning Balance
Less: Mandatory Amortization
Ending Balance

Senior Notes Interest Rate

Senior Notes Interest Expense

Step 5. Returns Calculation

Exit Valuation 2020A 2021E 2022E 2023E 2024E
($ in millions)

Exit LTM EBITDA

Exit Multiple Assumption
Exit Enterprise Value
Less: Debt
Plus: Cash
Exit Equity Value

Cash (Outflows) / Inflows Year 0 Year 1 Year 2 Year 3 Year 4

12/31/20 12/31/21 12/31/22 12/31/23 12/31/24
Exit Year 2021
Exit Year 2022
Exit Year 2023
Exit Year 2024
Exit Year 2025

IRR
MOIC
 1

$ Fee

$ Amount

2025E
2025E

2.3%
 2025E

Year 5
12/31/25
Basic LBO Model
($ in millions)
Step 1. Model Assumptions

Entry Valuation Transaction Assumptions

LTM EBITDA $100 Transaction Fees
Entry Multiple 10.0x Financing Fees
Purchase Enterprise Value $1,000 Financing Fees Amortization Period
Cash to B/S

Circularity Toggle

Debt Assumptions x EBITDA $ Amount Rate Floor % Amort. % Fee

Revolver 0.0x - L + 400 - - 2.0%
Term Loan B 4.0x 400 L + 400 2.0% 5.0% 2.0%
Senior Notes 2.0x 200 8.5% - - 2.0%
Total Debt 6.0x $600

Step 2. Sources & Uses Table

Sources & Uses

Sources x EBITDA $ Amount Uses
Revolver 0.0x - Purchase Enterprise Value
Term Loan B 4.0x 400 Cash to B/S
Senior Notes 2.0x 200 Transaction Fees
Sponsor Equity 4.3x 427 Financing Fees
Total Sources $1,027 Total Uses

Step 3. Free Cash Flow Projection

FCF Projection 2020A 2021E 2022E 2023E 2024E

($ in millions)

Revenue $1,000 $1,100 $1,210 $1,331 $1,464

EBITDA $100 $110 $121 $133 $146

Less: D&A (22) (24) (27) (29)
EBIT $88 $97 $106 $117
Less: Interest (41) (39) (38) (37)
Less: Amortization of Financing Fees (2) (2) (2) (2)
EBT $46 $56 $67 $78
Less: Taxes (16) (20) (23) (27)
Net Income $30 $36 $43 $51
Plus: D&A 22 24 27 29
Plus: Amortization of Financing Fees 2 2 2 2
Less: Capex (22) (24) (27) (29)
Less: Δ in NWC (11) (12) (13) (15)
Less: Mandatory Amortization (20) (20) (20) (20)
Free Cash Flow (Pre-Revolver) $0 $6 $12 $18
Revolver Drawdown / (Paydown) - - - -
Free Cash Flow (Post-Revolver) $0 $6 $12 $18
Beginning Cash Balance $5 $5 $11 $23
Net Change in Cash Flow 0 6 12 18
Ending Cash Balance $5 $11 $23 $41

Operating Assumptions
Revenue Growth % 10.0% 10.0% 10.0% 10.0% 10.0%
EBITDA Margin % 10.0% 10.0% 10.0% 10.0% 10.0%
D&A % of Revenue 2.0% 2.0% 2.0% 2.0%
Capex % of Revenue 2.0% 2.0% 2.0% 2.0%
Δ in NWC % of Revenue 1.0% 1.0% 1.0% 1.0%
Tax Rate % 35.0% 35.0% 35.0% 35.0%

Step 4. Debt Schedule

Debt Schedule 2021E 2022E 2023E 2024E

($ in millions)

LIBOR (%) 1.5% 1.7% 1.9% 2.1%

Revolver
Beginning Balance - - - -
Revolver Drawdown / (Paydown) - - - -
Ending Balance - - - -

Total Revolver Capacity $50 $50 $50 $50

Beginning Available Capacity $50 $50 $50 $50

Ending Available Capacity $50 $50 $50 $50

Revolver Interest Rate 5.5% 5.7% 5.9% 6.1%

Revolver Interest Expense - - - -

Unused Revolver Commitment Fee 0.25% 0.25% 0.25% 0.25%

Unused Commitment Fee $0.1 $0.1 $0.1 $0.1

Term Loan B
Beginning Balance $400 $380 $360 $340
Less: Mandatory Amortization (20) (20) (20) (20)
Ending Balance $380 $360 $340 $320

TLB Interest Rate 6.0% 6.0% 6.0% 6.1%

TLB Interest Expense $23 $22 $21 $20

Senior Notes
Beginning Balance $200 $200 $200 $200
Less: Mandatory Amortization - - - -
Ending Balance $200 $200 $200 $200

Senior Notes Interest Rate 8.5% 8.5% 8.5% 8.5%

Senior Notes Interest Expense $17 $17 $17 $17

Step 5. Returns Calculation

Exit Valuation 2020A 2021E 2022E 2023E 2024E
($ in millions)

Exit LTM EBITDA $110 $121 $133 $146

Exit Multiple Assumption 10.0x 10.0x 10.0x 10.0x
Exit Enterprise Value $1,100 $1,210 $1,331 $1,464
Less: Debt (580) (560) (540) (520)
Plus: Cash 5 11 23 41
Exit Equity Value $525 $661 $814 $985

Cash (Outflows) / Inflows Year 0 Year 1 Year 2 Year 3 Year 4

12/31/20 12/31/21 12/31/22 12/31/23 12/31/24
Exit Year 2021 ($427) $525
Exit Year 2022 ($427) $661
Exit Year 2023 ($427) $814
Exit Year 2024 ($427) $985
Exit Year 2025 ($427)

IRR 23.1% 24.4% 24.0% 23.2%

MOIC 1.2x 1.5x 1.9x 2.3x
 $10
2.0%
7 Years
$5

$ Fee
-
8
4
$12

$ Amount
$1,000
5
10
12
$1,027

2025E

$1,611

$161
(32)
$129
(37)
(2)
$90
(32)
$59
32
2
(32)
(16)
(20)
$24
-
$24
 $41
24
$65

10.0%
10.0%
2.0%
2.0%
1.0%
35.0%

2025E

2.3%

-
-
-

$50

$50
$50

6.3%
-

0.25%
$0.1

$320
(20)
$300

6.3%
$20

$200
-
$200

8.5%
$17
 2025E

$161
10.0x
$1,611
(500)
65
$1,176

Year 5
12/31/25

$1,176

22.4%
2.8x