Deal Lab · Buyout model 1.0
PT XLSMART Telecom Sejahtera Tbk Buyout Model
A buyout of PT XLSMART Telecom Sejahtera Tbk on its published figures for fiscal 2021, in rupiah: revenue flat, the margin and the shares of revenue of that period, entry and exit at 10.0x EBITDA, exit after 5 years.
Returns
Internal rate of return
−9.0%
Multiple of money
0.62x
Sponsor's equity
Rp74.45tn
Enterprise value
Rp140.42tn
Proceeds at exit
Rp46.47tn
Sources and Uses
| Uses | Amount |
|---|---|
| Equity price | Rp107.44tn |
| Borrowings refinanced | Rp10.27tn |
| Transaction costs | Rp2.81tn |
| Financing fees | Rp897bn |
| Minimum cash | Rp535bn |
| Uses | Rp121.95tn |
| Sources | Amount |
|---|---|
| Senior loan | Rp33.63tn |
| Subordinated notes | Rp11.21tn |
| Cash of the company | Rp2.66tn |
| Sponsor's equity | Rp74.45tn |
| Sources | Rp121.95tn |
Projection
| Closing | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|---|
| Revenue | Rp26.75tn | Rp26.75tn | Rp26.75tn | Rp26.75tn | Rp26.75tn | Rp26.75tn |
| EBITDA of the case | Rp14.04tn | Rp14.04tn | Rp14.04tn | Rp14.04tn | Rp14.04tn | Rp14.04tn |
| Cash cost of leases | Rp5.17tn | Rp5.17tn | Rp5.17tn | Rp5.17tn | Rp5.17tn | Rp5.17tn |
| Depreciation and amortisation | Rp9.96tn | Rp9.96tn | Rp9.96tn | Rp9.96tn | Rp9.96tn | |
| Capital expenditure | Rp8.63tn | Rp8.63tn | Rp8.63tn | Rp8.63tn | Rp8.63tn | |
| Increase in working capital | Rp0 | Rp0 | Rp0 | Rp0 | Rp0 | |
| Interest | Rp4.43tn | Rp4.79tn | Rp5.19tn | Rp5.56tn | Rp5.53tn | |
| Tax | Rp0 | Rp0 | Rp0 | Rp0 | Rp0 | |
| Cash available for debt service | Rp246bn | Rp246bn | Rp246bn | Rp246bn | Rp246bn |
Debt Schedule
| Closing | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|---|
| Senior loan | Rp33.63tn | Rp33.29tn | Rp32.95tn | Rp32.62tn | Rp32.28tn | Rp31.94tn |
| Subordinated notes | Rp11.21tn | Rp11.21tn | Rp11.21tn | Rp11.21tn | Rp11.21tn | Rp11.21tn |
| Revolving facility | Rp0 | Rp4.52tn | Rp9.40tn | Rp14.04tn | Rp14.04tn | Rp14.04tn |
| Cash | Rp535bn | Rp535bn | Rp535bn | −Rp101bn | −Rp5.75tn | −Rp11.38tn |
| Debt to EBITDA | 5.00x | 5.30x | 5.62x | 5.93x | 5.90x | 5.88x |
| EBITDA to interest | 3.17x | 2.93x | 2.71x | 2.52x | 2.54x |
Covenants and the Credit View
| Closing | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|---|
| Limit of debt to EBITDA | 6.50x | |||||
| Lease-adjusted debt to EBITDA | 5.00x | 5.30x | 5.62x | 5.93x | 5.90x | 5.88x |
| Band of debt to EBITDA | Highly leveraged | Highly leveraged | Highly leveraged | Highly leveraged | Highly leveraged | Highly leveraged |
Return Bridge
| Amount | |
|---|---|
| Sponsor's equity | Rp74.45tn |
| EBITDA growth | Rp0 |
| Change of multiple | Rp0 |
| Net debt repaid | −Rp24.27tn |
| Non-controlling interests | Rp0 |
| Costs at closing | −Rp3.71tn |
| Management and limited liability | Rp0 |
| Proceeds at exit | Rp46.47tn |
Sensitivity Tables
| Entry by exit | 8.00x | 9.00x | 10.0x | 11.0x | 12.0x |
|---|---|---|---|---|---|
| 8.00x | −14.1% | −5.4% | 0.9% | 5.9% | 10.2% |
| 9.00x | −21.1% | −11.6% | −5.0% | 0.1% | 4.4% |
| 10.0x | −24.4% | −15.3% | −9.0% | −4.1% | 0.0% |
| 11.0x | −27.0% | −18.2% | −12.1% | −7.4% | −3.4% |
| 12.0x | −29.2% | −20.7% | −14.7% | −10.1% | −6.3% |
| Debt by growth | −4.0% | −2.0% | 0.0% | 2.0% | 4.0% |
|---|---|---|---|---|---|
| 4.00x | −14.6% | −9.5% | −5.0% | −1.0% | 2.8% |
| 4.50x | −18.6% | −12.1% | −6.8% | −2.1% | 2.1% |
| 5.00x | −24.3% | −15.6% | −9.0% | −3.5% | 1.3% |
| 5.50x | −35.0% | −20.6% | −11.9% | −5.2% | 0.3% |
| 6.00x | −100% | −29.4% | −16.1% | −7.6% | −0.9% |
Solvers
Highest entry multiple for a return of 20.0%
n/a
No entry multiple reaches the target
Revenue growth a year for a return of 20.0%
13.9%
The target return
Debt capacity at closing, times EBITDA
6.00x
The loan to value limit
Assumptions and Their Origins
| Group | Assumption | Value | Origin |
|---|---|---|---|
| Transaction | Entry multiple | 10.0x | Convention of buyout 1.0 |
| Transaction | Years to exit | 5 years | Convention of buyout 1.0 |
| Transaction | Transaction costs | 2.0% | Convention of buyout 1.0 |
| Transaction | Financing fees | 2.0% | Convention of buyout 1.0 |
| Transaction | Minimum cash, of revenue | 2.0% | Convention of buyout 1.0 |
| Financing | Debt at closing, times EBITDA | 5.00x | Convention of buyout 1.0 |
| Financing | Debt at most, of the enterprise value | 60.0% | Convention of buyout 1.0 |
| Financing | Senior loan, of the new debt | 75.0% | Convention of buyout 1.0 |
| Financing | Senior loan repaid each year | 1.0% | Convention of buyout 1.0 |
| Financing | Cash sweep | 100% | Convention of buyout 1.0 |
| Financing | Revolving facility, times EBITDA | 1.00x | Convention of buyout 1.0 |
| Financing | Base rate | 5.8% | Policy rate of Indonesia, BIS central bank policy rates, 19 October 2026 |
| Financing | Senior loan spread | 3.5% | Convention of buyout 1.0 |
| Financing | Subordinated notes spread | 6.0% | Convention of buyout 1.0 |
| Financing | Revolving facility spread | 3.0% | Convention of buyout 1.0 |
| Financing | Covenant headroom on debt to EBITDA | 30.0% | Convention of buyout 1.0 |
| Financing | Minimum EBITDA to interest | 2.00x | Convention of buyout 1.0 |
| Operations | Revenue growth a year | 0.0% | Convention of buyout 1.0 |
| Operations | EBITDA margin | 52.5% | EBITDA over revenue, fiscal 2021 |
| Operations | Cash cost of leases, of revenue | 19.3% | Cash cost of leases over revenue, fiscal 2021 |
| Operations | Depreciation and amortisation, of revenue | 37.2% | Depreciation and amortisation over revenue, fiscal 2021 |
| Operations | Capital expenditure, of revenue | 32.3% | Median capital expenditure over revenue, fiscal 2023 to 2023 |
| Operations | Working capital, of revenue | −37.2% | Working capital over revenue, end of the fiscal 2021 |
| Operations | Leases as debt | Yes | Leases as debt, the basis of the credit metrics |
| Operations | Share-based pay added back | No | Convention of buyout 1.0 |
| Taxes | Tax rate | 22.0% | Combined statutory rate of corporate income tax of Indonesia, OECD Corporate Tax Statistics, 2026 |
| Taxes | Interest deducted up to 30% of EBITDA | No | Convention of buyout 1.0 |
| Exit | Exit multiple | 10.0x | Convention of buyout 1.0 |
| Exit | Management share of the proceeds | 0.0% | Convention of buyout 1.0 |
| Exit | Target return | 20.0% | Convention of buyout 1.0 |
Inputs and Their Documents
Published figures of fiscal 2021, each with the documents it comes from.
| Input | Value | Method | Documents |
|---|---|---|---|
| Adjusted EBITDA | Rp14.04tn | Adjusted EBITDA of the company page | Annual report 2022-12 |
| Share-based pay | Rp0 | No share-based pay is reported | Annual report 2022-12 |
| EBITDA after share-based pay | Rp14.04tn | Adjusted EBITDA less share-based pay | Annual report 2022-12 |
| Depreciation and amortisation | Rp9.96tn | Depreciation and amortisation of adjusted EBITDA | Annual report 2022-12 |
| Revenue | Rp26.75tn | Revenue of the base period | Annual report 2022-12 |
| Borrowings | Rp10.27tn | Total debt less lease liabilities | Annual report 2022-12 |
| Lease liabilities | Rp25.38tn | Lease liabilities | Annual report 2022-12 |
| Cash and short-term investments | Rp2.66tn | Cash and short-term investments | Annual report 2022-12 |
| Non-controlling interests | Rp0 | The balance sheet reports none | Annual report 2022-12 |
| Receivables | Rp525bn | Receivables | Annual report 2022-12 |
| Payables | Rp10.64tn | Payables | Annual report 2022-12 |
| Inventories | Rp156bn | Inventories | Annual report 2022-12 |
| Payments of lease liabilities | Rp3.47tn | Payments of lease liabilities | Annual report 2022-12 |
| Interest on lease liabilities | Rp1.69tn est. | Interest on lease liabilities at the average rate of finance costs on total debt | Annual report 2022-12 |
| Capital expenditure | Rp10.42tn | Capital expenditure of the latest fiscal year | Annual report 2024-12 |
Checks of the Model
- Sources equal uses
- The equity price is above nil
- The sponsor's equity is above nil
- Each balance of debt stays between nil and its amount at closing
- Cash is the cash of the year before and the cash flow of the year
- Cash stays at the minimum unless a shortfall is stated
- The 6 parts of the bridge add up to the proceeds less the sponsor's equity
- The cash flows at the internal rate of return have a present value of nil
Deal Lab computes arithmetic on published figures and on the assumptions of the user. It values no company, recommends no transaction and forecasts no result.