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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 20 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.

If a normalised working capital level of 150 is referenced, what is the purchase price for the shares at signing (working capital level of 100, net debt 100)?

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

950

B

800

C

850

D

900