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Dupont Coatings Financial Overview

Dupont Performance Coatings was purchased for $1,000 using 100% equity. Projected sales are flat at $4,000 per year through 2016. EBITDA is projected to be stable at $400 per year, representing a 10% EBITDA margin. Senior debt will be paid down by $100 per year from free cash flow. Returns analysis shows the sponsor IRR target of approximately 15.2% is met, while the mezzanine target return is 9%.

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284 views3 pages

Dupont Coatings Financial Overview

Dupont Performance Coatings was purchased for $1,000 using 100% equity. Projected sales are flat at $4,000 per year through 2016. EBITDA is projected to be stable at $400 per year, representing a 10% EBITDA margin. Senior debt will be paid down by $100 per year from free cash flow. Returns analysis shows the sponsor IRR target of approximately 15.2% is met, while the mezzanine target return is 9%.

Uploaded by

w_fib
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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Dupont: Performance Coatings

SOURCES USES
Senior Debt (Paid down every year) 0 0.0% Purchase Price 1,000 100.0%
Mezzanine Debt 0 0.0% Fees 0 2.0%
Common Equity Total Uses 1,000 100.0%
Management 0 0.0%
Sponsor 0 0.0% Purchase Price/2011 EBITDA 2.5 X
Total Equity 0 0.0% Purchase Price/2012E EBITDA 2.5 X
Total Sources 1,000 100.0%

Interest Rate on Senior Debt (Pay down) 5.00% 5.00% 5.00% 5.00% 5.00%
Interest Rate on Mezzanine 10.0% 10.0% 10.0% 10.0% 10.0%

(Exhibit 9)
Historical (Exhibits 5 and 9) Projected Years Ending December 31,
INCOME STATEMENT 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sales 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000
Growth 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

EBITDA 400 400 400 400 400 400 400 400 400 400
EIBTDA Margin 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
Depreciation 100 100 100 100 100 100 100 100 100 100
EBIT 300 300 300 300 300 300 300 300 300 300
EBIT Margin 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5% 7.5%
Interest Expense
Senior Debt (Paid down every year) 0 (5) (10) (15) (20)
Mezzanine Debt 0 0 0 0 0
Total Interest Expense 0 (5) (10) (15) (20)
Pre-tax income 300 305 310 315 320
Taxes 24.9% 75 76 77 79 80
Net Income 225 229 233 236 240

Capital Expenditures

CASH FLOW STATEMENT


Net Income 225 229 233 236 240
Plus: Depreciation and Amortization 100 100 100 100 100 100 100 100 100
Plus: (incr) decr in Wkg. Cap. NA NA NA NA 0 0 0 0 0
Less: Capital Expenditures (Ex 5 and 9) 100 100 100 100 100 100 100 100 100 100
Less:

Cash Flow Available for Debt Reduction Free Cash Flow 100 100 100 100 100
Debt:
Senior Debt (Paid down every year) - (100) (200) (300) (400) (500)
Mezzanine Debt - 0 0 0 0 0
Total Debt Outstanding - (100) (200) (300) (400) (500)

RETURNS ANALYSIS
Investor Ownership % of $ Ownership Options Ownership Final Year EBITDA 400 400 400
Sponsor - #DIV/0! #DIV/0! #DIV/0! Exit Multiple 10.0 11.0 12.0
Mezzanine 0 0.0% 0.0% 0.0% Total Ent. Value 4,000 4,400 4,800
Management 0 #DIV/0! #DIV/0! 0.0% #DIV/0! Less: Net Debt (500) (500) (500)
Total Equity 0 #DIV/0! #DIV/0! 0.0% #DIV/0! Common Equity Value 4,500 4,900 5,300

EBITDA Multiple 11.0 x


Equity Returns 2011 2012 2013 2014 2015 2016 IRR
Sponsor 0 0 0 0 0 #DIV/0! #DIV/0! Should be approximately 15.2%

Management (year 5 less option exercise) 0 0 0 0 0 #DIV/0! 0.0% No Equity to Management

Mezzanine Return
Equity (less option exercise) 0 0 0 0 0
Interest - 0 0 0 0 0
Debt - 0
Blended Debt & Equity 0 0 0 0 0 0 Err:523 Should be 9%

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