The last step in this model is now recalculating the IRR. Let's have a look at how the calculation's working at the moment. We've got EBITDA figure that helps us come up with our EV and then the net debt. Let's have a look at what's happening to the net debt at the moment. It's taking the senior debt, including the recapitalization, so that senior debt's gone up. It's including that extra unsecured note recapitalization, and it's in subtracting the cash. Now that cash is meant to be 0. We're not meant to have any cash in this LBO model. It's the fees we need to turn the circular switch on so that the fees are taken out. So let's enable iterative calculations.

There we go. And let's go to the info tab. Turn that circular switch on. Let's double check that net debt again. Ending cash has gone to 0. Great.

So my equity value at the moment is my EV less than net debt. Great. Gets me some equity value, but the dividends recap, that line still needs to be added in. That dividend recap is gonna come from row 80. Now I'm gonna put this in as a negative, because if we look at row 80, the dividend recap is showing as a negative. It's showing as a cash outflow. Instead, we're now looking at it as an inflow to the shareholders. It goes out from the company, it goes into the shareholders.

So I copy that all the way to the right. There we've got that extra cashflow. Great. And now we just need to update the cash flow to the equity holders. It's the equity value. Yes, but we just need to add in this one extra line of the dividend recap, what that form is saying. At the moment, it's saying if we're in the exit year, give me the equity value, but we're now adding the dividend recap even if we're not in an exit year.

So as I copy that to the right, we now get that extra cash flow in year three. So what's that done to the IRR? The IRR is now 27.8.

So we need to do some analysis. Has this dividend recap been a positive move for the LBO or should we have avoided it altogether? Well, we can compare it to the base case tab. If we go to the base case tab and we scroll down and find the IRR there, ah, it was 26.1%. So the base case recap goes up to 27.8. The dividend recap looks like it is a success. Fantastic. However, we do need to just make some checks. Let's go to the recap tab and see what's happened to the debt levels.

I scroll down towards the bottom. Yes, I can see my senior debt was going down, down, down. Then it shot up, but it's the multiples I really care about. I can see the multiple was going down and then it jumped up. Unsecured notes was going down and it's increased. And overall, my total debt has jumped up to 5.1 times EBITDA. Now we need to be careful that that multiple doesn't get too high.

This model is getting a big thumbs up from the shareholders, but our lenders who are giving us all this extra debt, they're gonna want to make sure that that total debt doesn't increase too high, and that it then decreases over time. We are seeing it decrease over the future past the recap. So this model is very indicative of a good dividend recapitalization, and we'd be looking to go ahead with it.