Reverse paper LBO: bought at $400 EV, 5-year hold. EBITDA stays $100, sold at 4x. 2.5x MOIC achieved. D&A $40, interest 10%, no tax, no NWC change, CapEx $40. What was the original equity check?

Question

IBPrep · Accepted Answer

Entry: EV $400, so Equity + Debt = $400. Exit: 4x × $100 = $400, plus accumulated FCF.

Reverse paper LBO: bought at $400 EV, 5-year hold. EBITDA stays $100, sold at 4x. 2.5x MOIC achieved. D&A $40, interest 10%, no tax, no NWC change, CapEx $40. What was the original equity check?

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