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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 24 of 52

Case

Case study: Working capital moves while net debt is flat

Expand / collapse

The same company is acquired at an Enterprise Value of 1,000. Net debt is 100 at both signing and closing, but working capital rises from 100 at signing to 150 at closing. The parties consider a normalised working capital reference of 100.

Net debt stays at 100 from signing to closing, but working capital rises from 100 to 150. With a normalised working capital reference of 100, what is the purchase price at closing?

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

900

B

1,000

C

850

D

950