1
Q
Purchase Price Acccounting (GoodWill)
A
Total GoodWill Created = Purchase Price - Book Equity + Old Goodwill
Remember to 0 out existing goodwill
2
Q
Senior Debt
A
Up to 3X Debt/EBITDA, 6-8%
3
Q
Subordinated Debt
A
Up to 5X Debt/EBITDA, 9-12%
4
Q
Mezzanine
A
Up to 1X Debt/EBITDA, 15-19% (PIK)
5
Q
Key Credit Statistics and Range
A
Total Debt/EBITDA, Max 7.5X Senior Bank Debt/EBITDA, Max 4.5X EBITDA/Interest Coverage, Min 2.0X EBITDA-Capex Coverage, Min 1.6X Bank Debt Payoff, 6-8 years Equity Contribution, At least 25%
6
Q
Sources
A
Cash
Debt
Sponsor’s Equity (Plug)
7
Q
Uses
A
Purchase of Equity (from Transaction assumptions)
Refinancing of Existing Debt
Transaction Expenses
8
Q
Cash Flow Available for Debt Repayment
A
NI+D&A+Decrease/(Increase) in WC-Capex
9
Q
Net Interest Expense (For Income Statement)
A
Total Interest Expense - Interest Income
PRE
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