OpCo: leveraged buyout

A leveraged buyout: entry at a stated multiple, debt paid down out of operating cash flow, and an exit that returns the sponsor's equity.

Every number below is checked against an independent reference implementation on every commit — period by period, and on each metric, inside a declared tolerance. See benchmark methodology.

The case

A five-year leveraged buyout of a services business. Entry at 8.0x a $33.6m run-rate EBITDA, funded with term debt; the business grows, pays the debt down out of operating cash flow, and is sold at an exit multiple. Working capital moves on a days-based policy — receivables, payables and inventory — rather than as a stated figure, and cash taxes are paid on the levered result.

The reference

Sponsor buyout conventions: sources and uses at entry, a debt schedule paid from operating cash flow, working capital driven by days outstanding, and an exit at a multiple of trailing earnings.

Not redistributable. The source cannot be published, so its conventions are recreated independently of the model and compared period by period.

What it exercises

The widest span of the opco pack's contract surface: entry, hold and exit rather than one mechanic.

The result

Present value 13,883,137.75, multiple on invested capital 3.467004 and lifetime revenue 69,485,786.14.

Asserted: net cash flow per period, plus the three summary figures.

The delta

None: every period agrees inside a one-cent tolerance. The multiple carries a basis-point tolerance, being computed from an iterative root.

Run configuration

{
  "deterministic": {
    "annual_discount_rate": 0.12
  }
}

Verified results

Checked period by period: 1 series across 60 periods — 60 values in all, each within ±0.01 of the reference.

• net_cash_flow

Summary metrics for the base run: