M&A case: Covenant
An acquirer models deal impact on leverage and returns over five years. Covenant is used as the anchor to compare conservative and ambitious scenarios.
- ebitda_eur:
- 4320000
- entry_multiple:
- 8
- debt_ratio:
- 59%
- hold_period_years:
- 4
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M&A / LBO⚗ Includes simulator
Covenant
Covenant is a concept that clarifies deal structure, leverage, and exit value creation.
Deep dive
Covenant helps you test whether the transaction creates value after integration and debt service. Helpful formula: define scope clearly and compare two scenarios before deciding.
Key formula
Covenant = Protective clause in a loan agreement
Real-world examples
Pitfalls to avoid
- Overstating synergies without a concrete capture plan.
- Underestimating refinancing and covenant pressure post-close.
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