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Private Equity

Lecture 9 - 10: LBO Model, EV to Equity and Exit

Comprehensive quiz covering LBO model construction, types of EBITDA, value creation strategies, the EV-to-Equity bridge, net debt and working capital adjustments, completion mechanisms (locked box vs. completion accounts), governance, and exit routes.

Question 19 of 52

Case

Case study: Working capital between signing and closing

Expand / collapse

A company is acquired at an Enterprise Value of 1,000. At signing, net debt is 100 and working capital sits at a level of 100. At closing, working capital has risen to 150 and net debt has risen to 150. The parties are considering whether to reference a normalised working capital level of 150 in the deal.

With no working capital adjustment, what is the purchase price for the shares at closing (when net debt has risen to 150)?

Pick one: press 1-4 on your keyboard or click an option.
A

1,000

B

850

C

950

D

900