24
Financing the
Acquisition
§A
$20 million purchase price implies normalized operating
earnings (EBITDA) of approx. $4.0 million (5.0x)
§We
also assume there are no unusually significant assets to
leverage (ie; land, large amounts of unleveraged
capital equipment, etc.)
§Also
assume no material pre-existing funded debt on the target
company
§Adequate
working capital is retained in the business post-acquisition
