lbocapacity2 - NUKEM - A case study in leveraged buyout...

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NUKEM - A case study in leveraged buyout analysis A small group of engineers and armed forces veterans is considering a leveraged buyout of the servic For several months they have worked closely with a private equity firm on analysing the possibilities. At last they have come up with some numbers to show the banks and potential equity investors. The idea is that they would form a new company, Mushroom Energy, to buy the division. The new company would issue 13 million shares with a par value of $10. The proposed purchase price is $400 million. In addition the new company would refinance million worth of long-term lease obligations. Fees are expected to run at 3% of the purchase price. Expected new capex and restructuring costs are estimated at 10% Ongoing capex wil be 10% of EBIT. The tax rate is 35% The company expects to have EBIT of 75 million in the 12 months prior to purchase. Th predicted to grow at 7% for the first 3 years and 3% thereafter. Discussions with banks suggest that for this kind of business it might be difficult to syndicate an
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This note was uploaded on 10/29/2009 for the course FINANCE 502 taught by Professor Gore during the Spring '09 term at Bahcesehir University.

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lbocapacity2 - NUKEM - A case study in leveraged buyout...

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