Hi Everyone,

Self-funded searcher with no buy-side M&A experience. I'm wondering if my (hypothetical) assumptions (preferred rate, seller note rate, investor % of common) are in line with reality? Target is SMB Defense mfg with $2.5M Adj EBITDA.

EV = $9.75M
Cash to BS = $500K
Txn Fees and expenses = $350

Capital Stack
47% Senior, SBA 7(a) (P+ 2.25%); P = 5.5%
25% Seller Note (8%)
28% Investor Equity (12% preferred rate + 30% of common)

Thinking preferred rate may be on the higher end? Have been advised 10-12%


Thankful for any guidance.

Best,
Adam