Let's have a look at the recap model. There are three sheets that we're going to be focused on. The first one is this base case tab. Then we'll be looking at the green recap sheet and the green base case recap sheet. What happens here is the base case has a basic LBO model in it, it's got an income statement. We use that to help us pay off some debts and calculating IRR. That's all filled in in the base case model. The base case recap sheets is very similar. It's just another LBO model. It's got an income statement. We use some of that to pay off some debt and calculate an IRR. But if I scroll down, there are some lines that are missing and we've highlighted them. Just to give them some prominence. Here it's the income statement and there are gonna be some fees from the recap. If I scroll down a bit more in the debt servicing, we'll have the recap itself here in row 67 and the interest expense, which looks like it's already filled in, that will need some editing. So where are we going to get these new figures from? We'll get them from the recap tab.

In the recap tab, we've got some assumptions for the recap. Our recap will be happening in year three. At the moment, our LBO model has an exit of year four or five. So we're having our recap partway through the LBOs life. We've then got some arrangement fee percentages. We're told that 100% of the proceeds available from the recap will be available for the dividend distribution.

The new debt multiples are here and their interest rates.

And then we need to start modeling these items. We'll start by calculating the existing debt and the existing leverage multiples. Once we've got that, we'll then calculate the recapitalization amounts I the new debt, and we'll then use that new debt to pay off the old debt above. And we'll do that in the use of recapitalization proceed section. So to say that, again, we'll calculate the old debt, the new debt, and then we'll look at this use of recapitalization proceeds to pay off the old debt using the new debt. And we'll pay off some fees as well. After that, we'll look at the new debt post recap. We'll model that out, and we'll model out the leverage multiples as well. So we'll have to do quite a bit of work in this recap tab, and then we'll put all of those new figures into the base case plus recap tab, and we'll then calculate the new IRR.