Corporate finance, at the frontier.

What is frozen. Organic EBITDA growth, cash conversion and path timing come from the first exhibit. This exhibit always tests all three stated actions in both packages. Editing the first exhibit does not silently change this comparison: click the freeze ribbon to capture new inputs. Debt, CNI, tax and acquired earnings are recalculated after the actions that actually execute. Play runs a 12-second tour of repricing savings first, then the RP threshold; it never changes the frozen business or make-whole expiry. Manual interaction pauses playback.

Acquisition test · end Y2. Opening leverage is (€500m debt − €0m cash) / €100m EBITDA = 5.00×. Test (all existing debt + full purchase debt − cash) / (buyer EBITDA + target EBITDA + synergies) ≤ 5.00×. Target EBITDA is 20% of buyer EBITDA; synergies are 5% of buyer + target. Price is 7× target-plus-synergy EBITDA. Closing is cash-free/debt-free; the seller is paid for synergies. The acquired business earns from Y3, never retrospectively.

Alternative debt routes. A failed acquisition-specific ratio can still use the general debt routes shown here. The general ratio is used first; the remaining need uses the greater of the fixed basket or EBITDA grower, less prior usage. This illustrative stacking convention excludes simultaneously incurred free-and-clear debt from the general ratio calculation. The dedicated acquisition test includes every euro. Basket usage does not automatically recycle on repayment.

Recap · end Y4. Requested borrowing and dividend = max(0, 5× actual PF EBITDA − net debt after the sweep). Execution is capped by debt permission and RP permission. The RP ratio route and independent general-basket-plus-CNI-builder route are alternatives, not additive. The builder credits the selected share of positive annual CNI and debits 100% of losses; the cumulative limb is floored at use, not reset every year. No entry run-rate income is credited. No equity top-up or distribution of retained cash is assumed.

Repricing and make-whole. Only surviving entry debt reprices: its 8.00% coupon falls by the selected saving, from 0 to 400 bps (75 bps gives 7.25%; 400 bps gives 4.00%). The first annual transaction date at or after expiry is used; the earliest is end Y1. Interest changes from the following year, so expiry at end Y5 produces no interest saving within the hold. Repricing occurs before other actions on the same date. The model waits rather than pays a premium, and assumes an at-par refinancing after expiry: no stepped call premium is modelled. This is a teaching convention, not a claim that expiry universally means par or early refinancing is prohibited. No fees, hedges or rate floors are modelled.

New-debt yield and optional MFN. Acquisition/recap debt is issued at 8.00% in both packages and is not repriced by the entry-debt action. MFN is disabled by default and can be enabled under the additional assumptions. With a 50bp tolerance, protected existing debt below 7.50% steps up to 7.50% on qualifying issuance. MFN never reduces a coupon. Issuance exactly at its expiry is outside protection. All pools are assumed eligible pari-passu debt; no carve-outs, OID or floor effects are modelled. The MFN interest line tracks coupon increments on actual balances, not an option value or full counterfactual loss.

Permission is not funding. All debt is assumed pari-passu secured, with matching lien and permitted-acquisition/investment permissions, no contractual default and an open lending market. These are selected-route assumptions—not a document parser or a funding commitment. Cash interest is the sum across debt pools; principal sweeps pro rata. An operating cash shortfall invalidates terminal KPIs rather than inventing liquidity.

The shared company model. Entry equity €400m; five-year hold; entry/exit value 9× EBITDA; D&A 15% of earned EBITDA; cash tax 25% of positive EBIT less interest, no tax-loss carryforwards. CFADS is post-tax EBITDA × cash conversion, before interest. The unconverted balance is capex + ΔNWC. Repricing, acquisition and recap occur after the year’s cash flow and principal sweep. Annual IRR includes the Y4 dividend and Y5 exit.