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Learn/LBO Modeling/Module 4
4.1·6 min read

Exit Equity Value

Apply an exit multiple to exit EBITDA, then subtract net debt to get the equity the sponsor walks away with.

By the end you can
  • ✓Compute exit enterprise value
  • ✓Bridge exit EV to exit equity
Exit Equity=(Exit EBITDA×Exit Multiple)−Net Debt at Exit\text{Exit Equity} = (\text{Exit EBITDA} \times \text{Exit Multiple}) - \text{Net Debt at Exit}
Worked example · Equity at exit
Given
  • •Exit EBITDA $140, 9.0x, at exit $230
Solution
  1. 1.Exit enterprise value
    140×9=1,260140 \times 9 = 1{,}260
  2. 2.Exit equity
    1,260−230=1,0301{,}260 - 230 = 1{,}030
Answer

The 's stake is worth $1,030 at exit, before splitting any management incentive.

Check yourself

Exit EBITDA $100, exit multiple 8x, net debt $150. Exit equity is:

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